Business Statements. The lower E&P drilling activity levels in 2015 and 2016 reduced the demand for our services, Customers — Our customers are principally major integrated and independent oil and gas E&P companies operating in the markets that we serve. During world. Historically, our marketing efforts for the sale of composite mats Sale of Environmental Services Segment Statements. Risks Related to the Worldwide Oil and Natural Gas Industry Risks Related to our Customer Concentration and reliance on the U.S. Exploration and Production Market Our ability to meet our debt service requirements and the continued availability of funds under our existing or future Risks Related to Operating Hazards Present in the Oil and Natural Gas Industry incorrect assumptions regarding business activity levels or results from our capital investments, acquired operations or failure to complete a planned acquisition transaction or to successfully integrate the operations or management of any acquired businesses or assets in a timely diversion of management's attention from existing operations or other unanticipated disruptions to our business associated with the implementation of our enterprise-wide operational and financial delays in completion and cost overruns associated with large construction projects, including the Risks Related to Legal and Regulatory Matters, Including Environmental Regulations self-insured retention limits on each claim, which are our exclusions for certain types of liabilities and limitations on coverage for damages resulting from coverage limits of the policies, and the risk that claims will exceed policy the financial strength and ability of our insurance carriers to meet their obligations under the In addition, our ability to continue to obtain insurance coverage on commercially reasonable terms is dependent upon a variety of factors impacting the insurance industry in general, which are outside our control. Any of the issues noted above, including insurance cost increases, uninsured or underinsured claims, or the inability of an insurance carrier to meet their financial obligations could have a material adverse effect on our profitability. ABL Facility. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Period High Low 2015 Fourth Quarter Third Quarter Second Quarter First Quarter 2014 Fourth Quarter Third Quarter Second Quarter First Quarter We have not paid any dividends during the three most recent fiscal years or any subsequent interim period, and we do not intend to pay any cash dividends in the foreseeable future. In addition, our Period Total Number of Shares Purchased(1) Average Price per Share Total Number of Maximum Approximate Dollar Value of Shares and Convertible Senior Notes that May Yet be Purchased Under Plans or Programs October 1 - 31, 2015 November 1 - 30, 2015 December 1 - 31, 2015 Total statements. The following data should be read in conjunction with the consolidated financial statements and notes thereto and with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Items 7 and 8 below. As of and for the Year Ended December 31, (In thousands, except share data) 2015 2014 2013 2012 2011 Consolidated Statements of Operations: Revenues Operating income (loss)(1) Interest expense, net Income (loss) from continuing operations Income from discontinued operations, net of tax Gain from disposal of discontinued operations, net of tax Net income (loss) Net income (loss) from continuing operations per common share (basic): Income (loss) from continuing operations Net income (loss) per common share Net income (loss) from continuing operations per common share (diluted): Income (loss) from continuing operations Net income (loss) per common share Consolidated Balance Sheet Data: Working capital Total assets Foreign bank lines of credit Current maturities of long-term debt Long-term debt, less current portion Stockholders' equity Consolidated Cash Flow Data: Net cash provided by (used in) operations Net cash used in investing activities Net cash provided by (used in) financing activities Our operating results depend, to a large extent, on oil and gas drilling activity levels in the markets we serve, and particularly for the Fluids Systems segment, the nature of the drilling operations (including the depth and whether the wells are drilled vertically or horizontally), which governs the revenue potential of each well. Year ended December 31, 2015 vs 2014 2014 vs 2013 2015 2014 2013 Count % Count % U.S. Rig Count Canadian Rig Count Total 2015 levels. States. As a result of the programs. Year Ended December 31, 2015 vs 2014 (In thousands) 2015 2014 % Revenues Cost of revenues Selling, general and administrative expenses Other operating income, net Impairments and other charges Operating income (loss) Foreign currency exchange loss Interest expense, net Income (loss) from continuing operations before income taxes Provision (benefit) for income taxes Income (loss) from continuing operations Income from discontinued operations, net of tax Gain from disposal of discontinued operations, net of tax Net income (loss) Selling, General and Administrative Expenses forgiven. Discontinued operations Year ended December 31, 2015 vs 2014 (In thousands) 2015 2014 % Revenues Fluids systems Mats and integrated services Total revenues Operating income (loss) Fluids systems Mats and integrated services Corporate office Operating income (loss) Segment operating margin Fluids systems Mats and integrated services Year ended December 31, 2015 vs 2014 (In thousands) 2015 2014 % United States Canada Total North America EMEA Latin America Asia Pacific Total Internationally, revenues decreased 18% to $229.2 million in 2015, as compared to $278.1 million in 2014, with activity gains in our EMEA region being more than offset by the unfavorable impact of currency exchange related to the strengthening U.S. dollar, along with reduced drilling activity in Brazil and Asia Pacific. The decline in revenues in the EMEA region included a $34 million reduction from the impact of currency exchange, partially offset by a $31 million increase in revenues from Mats and Integrated Services Year ended December 31, 2015 vs 2014 (In thousands) 2015 2014 % Mat rental and services Mat sales Total Year Ended December 31, 2014 vs 2013 (In thousands) 2014 2013 % Revenues Cost of revenues Selling, general and administrative expenses Other operating income, net Operating income Foreign currency exchange loss Interest expense, net Income from continuing operations before income taxes Provision for income taxes Income from continuing operations Income from discontinued operations, net of tax Gain from disposal of discontinued operations, net of tax Net income Year ended December 31, 2014 vs 2013 (In thousands) 2014 2013 % Revenues Fluids systems Mats and integrated services Total revenues Operating income (loss) Fluids systems Mats and integrated services Corporate office Operating income Segment operating margin Fluids systems Mats and integrated services Year ended December 31, 2014 vs 2013 (In thousands) 2014 2013 % United States Canada Total North America EMEA Latin America Asia Pacific Total Year ended December 31, 2014 vs 2013 (In thousands) 2014 2013 % Mat rental and services Mat sales Total Liquidity and Capital Resources of $7.8 million. These cash outflows were largely offset by the net proceeds from the December 2016 issuance of the Convertible Notes due 2021. (In thousands) 2015 2014 Senior Notes Debt issuance costs - Senior Notes Revolving credit facility Other Total Stockholder's equity Total capitalization Total debt to capitalization follows: In December 2016, we issued $100.0 million of unsecured convertible senior notes that mature on December 1, 2021, unless earlier converted by the holders pursuant to the terms of the notes. The notes bear interest at a rate of 4.0% per year, payable semiannually in arrears on June 1 and December 1 of each year. The Covenant December 31, 2015 September 30, 2015 December 31, 2014 Interest coverage ratio minimum Consolidated leverage ratio maximum Senior Secured leverage ratio maximum control events. 2015. (In thousands) 2016 Thereafter Total Current maturities of long term debt Long-term debt including capital leases Interest on 4.0% Senior Notes Foreign bank lines of credit Operating leases Trade accounts payable and accrued liabilities(1) Purchase commitments, not accrued Other long-term liabilities(2) Performance bond obligations Letter of credit commitments Total contractual obligations Excludes accrued interest on the Table does not allocate by year expected tax payments and uncertain tax positions due to the inability to make reasonably reliable estimates of the timing of future cash settlements with the respective taxing authorities. For additional discussion on uncertain tax positions, see “Note 8 - Income Taxes” in our In In completing this annual evaluation as of November 1, 2015, we also determined that the mats We file income tax returns in the United States and several non-U.S. jurisdictions and are subject to examination in the various jurisdictions in which we file. We are no longer subject to income tax examinations for U.S. federal and substantially all state jurisdictions for years prior to accounting pronouncements rate as determined by the credit agreement. At December 31, 2016, no borrowings were outstanding under the ABL Facility. (In thousands, except share data) 2015 2014 ASSETS Cash and cash equivalents Receivables, net Inventories Prepaid expenses and other current assets Total current assets Property, plant and equipment, net Goodwill Other intangible assets, net Deferred tax assets Other assets Total assets LIABILITIES AND STOCKHOLDERS’ EQUITY Short-term debt Accounts payable Accrued liabilities Total current liabilities Long-term debt, less current portion Deferred tax liabilities Other noncurrent liabilities Total liabilities Commitments and contingencies (Note 14) Common stock, $0.01 par value, 200,000,000 shares authorizedand 99,377,391 and 99,204,318 shares issued, respectively Paid-in capital Accumulated other comprehensive loss Retained earnings Treasury stock, at cost; 15,302,345 and 15,210,233 shares, respectively Total stockholders’ equity Total liabilities and stockholders' equity (In thousands, except per share data) 2015 2014 2013 Revenues Cost of revenues Selling, general and administrative expenses Other operating income, net Impairments and other charges Operating income (loss) Foreign currency exchange loss Interest expense, net Income (loss) from continuing operations before income taxes Provision (benefit) for income taxes Income (loss) from continuing operations Income from discontinued operations, net of tax Gain from disposal of discontinued operations, net of tax Net income (loss) Income (loss) per common share -basic: Income (loss) from continuing operations Income from discontinued operations Net income (loss) Income (loss) per common share -diluted: Income (loss) from continuing operations Income from discontinued operations Net income (loss) (In thousands) 2015 2014 2013 Net income (loss) Foreign currency translation adjustments Comprehensive income (loss) (In thousands) Common Stock Paid-In Capital Accumulated Other Compre- hensive Income (Loss) Retained Earnings Treasury Stock Total Balance at January 1, 2013 Net income Employee stock options, restricted stock andemployee stock purchase plan Stock-based compensation expense Income tax effect, net, of employee stock related activity Treasury shares purchased at cost Foreign currency translation Balance at December 31, 2013 Net income Employee stock options, restricted stock andemployee stock purchase plan Stock-based compensation expense Income tax effect, net, of employee stock related activity Treasury shares purchased at cost Foreign currency translation Balance at December 31, 2014 Net loss Employee stock options, restricted stock andemployee stock purchase plan Stock-based compensation expense Income tax effect, net, of employee stock related activity Foreign currency translation Other Balance at December 31, 2015 (In thousands) 2015 2014 2013 Cash flows from operating activities: Net income (loss) Adjustments to reconcile net income to net cash provided by operations: Impairments and other non-cash charges Depreciation and amortization Stock-based compensation expense Provision for deferred income taxes Net provision for doubtful accounts Gain on sale of a business Gain on sale of assets Excess tax benefit from stock-based compensation Change in assets and liabilities: (Increase) decrease in receivables (Increase) decrease in inventories (Increase) decrease in other assets Increase (decrease) in accounts payable Increase (decrease) in accrued liabilities and other Net cash provided by operating activities Cash flows from investing activities: Capital expenditures Increase in restricted cash Proceeds from sale of property, plant and equipment Proceeds from sale of a business Business acquisitions, net of cash acquired Net cash used in investing activities Cash flows from financing activities: Borrowings on lines of credit Payments on lines of credit Debt issuance costs Other financing activities Proceeds from employee stock plans Purchases of treasury stock Excess tax benefit from stock-based compensation Net cash used in financing activities Effect of exchange rate changes on cash Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year Cash paid for: Income taxes (net of refunds) Interest NEWPARK RESOURCES, INC. exploration market. Property, Plant and Equipment. Property, plant and equipment are recorded at cost. Additions and improvements that extend the useful life of Computer hardware and office equipment - Computer software - Autos & light trucks - Furniture, fixtures & trailers - Composite mats (rental fleet) - Machinery and heavy equipment - Owned buildings - Leasehold improvements Revenue Recognition. The Fluids Systems segment recognizes sack and bulk material additive revenues upon shipment of materials and passage of title. Formulated liquid systems revenues are recognized when utilized or lost downhole while drilling. An allowance for product returns is maintained, reflecting estimated future customer product returns. Engineering and related services are provided to customers as an integral component of the fluid system delivery, at agreed upon hourly or daily rates, and revenues are recognized when the services are performed. We currently anticipate adopting the new guidance retrospectively with the cumulative effect recognized as of the date of initial application in the first quarter of 2018. NEWPARK RESOURCES, INC. (In thousands) 2014 2013 Revenues Income from discontinued operations before income taxes Income from discontinued operations, net of tax Gain from disposal of discontinued operations before income taxes Gain from disposal of discontinued operations, net of tax Note 3 — Inventories (In thousands) Raw materials: Drilling fluids Mats Total raw materials Blended drilling fluids components Finished goods- mats Total inventories Note 4 — Property, Plant and Equipment (In thousands) 2015 2014 Land Buildings and improvements Machinery and equipment Computer hardware and software Furnitures and fixtures Construction in progress Less accumulated depreciation Composite mats (rental fleet) Less accumulated depreciation-mats Property, plant and equipment, net Note 5 — Goodwill and Other Intangible Assets (In thousands) Fluids Systems Mats and Integrated Services Total Balance at December 31, 2013 Effects of foreign currency Balance at December 31, 2014 Impairment Effects of foreign currency Balance at December 31, 2015 NEWPARK RESOURCES, INC. December 31, 2015 December 31, 2014 (In thousands) Gross Carrying Amount Accumulated Amortization Other intangible assets, net Gross Carrying Amount Accumulated Amortization Other intangible assets, net Technology related Customer related Employment related Total amortizing intangible assets Permits and licenses Trademarks Total indefinite-lived intangible assets Total intangible assets fair values of intangible assets impaired and acquired, which are classified within level 3 of the fair value hierarchy. (In thousands) 2016 2017 2018 2019 2020 Thereafter Total Technology related Customer related Employment related Total future amortization expense (In thousands) 2015 2014 Senior Notes Debt issuance costs - Senior Notes Revolving credit facility Other Total debt Less: current portion Long-term portion In December 2016, we issued $100.0 million of unsecured convertible senior notes (“Convertible Notes due 2021”) that mature on December 1, 2021, unless earlier converted by the holders pursuant to the terms of the notes. The notes bear interest at a rate of 4.0% per year, payable semiannually in arrears on June 1 and December 1 of each year. The Covenant December 31, 2015 September 30, 2015 December 31, 2014 Interest coverage ratio Consolidated leverage ratio Senior Secured leverage ratio control events. respectively, was included in other current assets in the accompanying balance sheet. Note 7 — Fair Value of Financial Instruments and Concentrations of Credit Risk (In thousands) Gross trade receivables Allowance for doubtful accounts Net trade receivables Income tax receivables Other receivables Total receivables, net 15 below. NEWPARK RESOURCES, INC. (In thousands) Balance at beginning of year Provision for uncollectible accounts Write-offs, net of recoveries Balance at end of year Year Ended December 31, (In thousands) 2015 2014 2013 Current tax expense (benefit): U.S. Federal State Foreign Total current Deferred tax expense (benefit): U.S. Federal State Foreign Total deferred Total provision (benefit) Year Ended December 31, (In thousands) 2015 2014 2013 Income (loss) from continuing operations Income from discontinued operations Total provision (benefit) Income (loss) from continuing operations before income taxes was as follows: Year Ended December 31, (In thousands) 2015 2014 2013 U.S. Foreign Income (loss) from continuing operations before income taxes Year Ended December 31, 2015 2014 2013 Income tax expense (benefit) at federal statuatory rate Nondeductible expenses Goodwill impairment Manufacturing deduction Different rates on earnings of foreign operations Change in valuation allowance Uncertain tax positions State tax expense (benefit), net Other Total income tax expense (benefit) Temporary differences and carryforwards which give rise to deferred tax assets and liabilities at December 31, (In thousands) 2015 2014 Deferred tax assets: Net operating losses Capitalized inventory costs Stock based compensation Accruals not currently deductible Unrealized foreign exchange Foreign tax credits Other Total deferred tax assets Valuation allowance Total deferred tax assets, net of allowances Deferred tax liabilities: Accelerated depreciation and amortization Tax on unremitted earnings Other Total deferred tax liabilities Total net deferred tax liabilities Non current deferred tax assets Non current deferred tax liabilities Net deferred tax liabilities 2017. A reconciliation of the beginning and ending provision for uncertain tax positions is as follows: (In thousands) 2015 2014 2013 Balance at January 1 Additions (reductions) for tax positions of prior years Additions for tax positions of current year Reductions for settlements with tax authorities Reductions for lapse of statute of limitations Balance at December 31 (In thousands of shares) 2015 2014 2013 Outstanding, beginning of year Shares issued upon exercise of options Shares issued for grants of time vested restricted stock (netof cancellations) Outstanding, end of year 2014. During 2016, 2015 $11.72. In February 2016, we repurchased $11.2 million of our Year Ended December 31, (In thousands, except per share data) 2015 2014 2013 Basic EPS: Income (loss) from continuing operations Weighted average number of common shares outstanding Basic income (loss) from continuing operations per common share Diluted EPS: Income (loss) from continuing operations Assumed conversions of Senior Notes Adjusted income (loss) from continuing operations Weighted average number of common shares outstanding-basic Add: Dilutive effect of stock options andrestricted stock awards Dilutive effect of Senior Notes Diluted weighted average number of common shares outstanding Diluted income (loss) from continuing operations per common share Stock options and restricted stock excluded from calculationof diluted earnings per share because anti-dilutivefor the period The maximum number of shares of common stock issuable under the 2014 Director Plan is 1,000,000 leaving 2016. The following table summarizes activity for our outstanding stock options for the year ended December 31, Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding at beginning of period Granted Exercised Expired or cancelled Outstanding at end of period Vested or expected to vest at end of period Options exercisable at end of period Year Ended December 31, 2015 2014 2013 Risk-free interest rate Expected life of the option in years Expected volatility Dividend yield Year Ended December 31, 2015 2014 2013 Weighted-average exercise price of the stock on the date of grant Weighted-average grant date fair value on the date of grant The total intrinsic value of options exercised was $0.1 million, $0.3 million Exercisable at end of period Nonvested Shares (Performance-Based) Shares Weighted-Average Grant Date Fair Value Outstanding at beginning of period Granted Forfeited Outstanding at the end of period Year Ended December 31, 2015 2014 2013 Estimated fair value at date of grant Year Ended December 31, 2015 2014 2013 Risk-free interest rate Average closing price Expected volatility Dividend yield Average closing price of our shares over the 30-calendar days ending May 16, During the year ended December 31, 2016, the total fair value of performance-based restricted stock units vested was $0.4 million. The following tables summarize the activity for our outstanding time-vested restricted stock awards and restricted stock units Nonvested Shares (Time-Vesting) Shares Weighted-Average Grant Date Fair Value Nonvested at January 1, 2015 Granted Vested Forfeited Nonvested at December 31, 2015 Nonvested Share Units (Time-Vesting) Shares Weighted-Average Grant Date Fair Value Nonvested at January 1, 2015 Granted Vested Forfeited Nonvested at December 31, 2015 Fluids Systems —Our Fluids Systems business NEWPARK RESOURCES, INC. Year Ended December 31, (In thousands) 2015 2014 2013 Revenues Fluids Systems Mats and Integrated Services Total Revenues Depreciation and Amortization Fluids Systems Mats and Integrated Services Corporate Office Total Depreciation and Amortization Operating Income (loss) Fluids Systems Mats and Integrated Services Corporate Office Operating Income (loss) Segment Assets Fluids Systems Mats and Integrated Services Assets of discontinued operations Corporate Total Assets Capital Expenditures Fluids Systems Mats and Integrated Services Corporate Total Capital Expenditures Year Ended December 31, (In thousands) 2015 2014 2013 Revenue United States Canada EMEA Latin America Asia Pacific Total Revenue Long-Lived Assets United States Canada EMEA Latin America Asia Pacific Total Long-Lived Assets Impairments and other non-cash charges in the consolidated statements of cash flows included the following: Wage and Hour Litigation A second case was filed by Josh Christensen in the fourth quarter of 2014 in Federal Court in Texas alleging that individuals treated as independent contractors should have been classified as employees and, as such, Escrow Claims Related to Sale of Environmental Services Business discovery process with mediation currently scheduled in March of 2017. (In thousands) 2016 2017 2018 2019 2020 Thereafter NEWPARK RESOURCES, INC. Quarter Ended (In thousands, except per share amounts) First Quarter Second Quarter Third Quarter Fourth Quarter Fiscal Year 2015 Revenues Operating income (loss) Income (loss) from continuing operations Net income (loss) Income (loss) per common share -basic: Income (loss) from continuing operations Net income (loss) Income (loss) per common share -diluted: Income (loss) from continuing operations Net income (loss) Fiscal Year 2014 Revenues Operating income Income from continuing operations Net income Income per common share -basic: Income from continuing operations Net income Income per common share -diluted: Income from continuing operations Net income 2016. 2016. Directors, Executive Officers and Corporate Governance Exhibits and Financial Statement Schedules Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets Consolidated Statements of Operations Consolidated Statements of Comprehensive Income Consolidated Statements of Stockholders’ Equity Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements By: Certificate of Designation of Series A Cumulative Perpetual Preferred Stock of Newpark Resources, Inc. incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on April 27, 1999 (SEC File No. 001-02960). Certificate of Designation of Series B Convertible Preferred Stock of Newpark Resources, Inc., incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on June 7, 2000 (SEC File No. 001-02960). Certificate of Rights and Preferences of Series C Convertible Preferred Stock of Newpark Resources, Inc., incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on January 4, 2001 (SEC File No. 001-02960). Certificate of Amendment to the Restated Certificate of Incorporation of Newpark Resources, Inc., incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on November 4, 2009 (SEC File No. 001-02960). Amended and Restated Bylaws, incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed March 13, 2007 (SEC File No. 001-02960). Specimen form of common stock certificate of Newpark Resources, Inc., incorporated by reference to the exhibit filed with the Company’s Registration Statement on Form S-1 (SEC File No. 33-40716). Indenture, dated October 4, 2010, between Newpark Resources, Inc. and Wells Fargo Bank, National Association, as trustee, incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on October 4, 2010 (SEC File No. 001-02960). First Supplemental Indenture, dated October 4, 2010, between Newpark Resources, Inc. and Wells Fargo Bank, National Association, as trustee, incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on October 4, 2010 (SEC File No. 001-2960). Form of 4.00% Convertible Senior Note due 2017, incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed on October 4, 2010 (SEC File No. 001-2960). Indenture, dated December 5, 2016, between Newpark Resources, Inc. Form of Amended and Restated Employment Agreement, dated as of December 31, 2008, between the registrant and Paul L. Howes, incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on May 1, 2009 (SEC File No. 001-02960). Indemnification Agreement, dated June 7, 2006, between the registrant and Paul L. Howes, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 13, 2006 (SEC File No. 001-02960). Employment Agreement, dated as of September 18, 2006, by and between Newpark Resources, Inc. and Mark J. Airola, incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on September 20, 2006 (SEC File No. 001-02960). Form of Non-Qualified Stock Option Agreement under the Newpark Resources, Inc. 2006 Equity Incentive Plan, incorporated by reference to Exhibit 4.4 to the Company’s Registration Statement on Form S-8 filed on March 26, 2007 (SEC File No. 333-0141577). Employment Agreement between Newpark Resources, Inc. and Bruce Smith dated April 20, 2007, incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2007 filed on May 8, 2007 (SEC File No. 001-02960). Amendment to the Indemnification Agreement between Newpark Resources, Inc. and Paul L. Howes dated September 11, 2007, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on September 14, 2007 (SEC File No. 001-02960). Newpark Resources, Inc., 2008 Employee Stock Purchase Plan, incorporated by reference to Exhibit 4.1 the Company’s Registration Statement on Form S-8 filed on December 9, 2008 (SEC File No. 333-156010). Form of Change of Control Agreement, incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2008 filed on May 2, 2008 (SEC File No. 001-02960). Amendment to Amended and Restated Employment Agreement between Newpark Resources, Inc. and Paul L. Howes dated April 20, 2009, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 23, 2009 (SEC File No. 001-02960). Amendment to Employment Agreement between Newpark Resources, Inc. and Bruce C. Smith dated April 22, 2009, incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on April 23, 2009 (SEC File No. 001-02960). Amendment to Employment Agreement between Newpark Resources, Inc. and Mark J. Airola dated April 22, 2009, incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on April 23, 2009 (SEC File No. 001-02960). Employment Agreement, dated as of October 15, 2010, by and between Newpark Resources, Inc. and Jeffery L. Juergens, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 18, 2010 (SEC File No. 001-02960). Newpark Resources, Inc. 2010 Annual Cash Incentive Plan, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 2, 2010 (SEC File No. 001-02960). Director Compensation Summary. Newpark Resources, Inc. 2006 Equity Incentive Plan (As Amended and Restated Effective June 10, 2009), incorporated by reference to Exhibit 4.6 to the Company’s Registration Statement on Form S-8 filed on August 14, 2009 (SEC File No. 333-161378). Amendment No. 1 to the Newpark Resources, Inc. 2006 Equity Incentive Plan (As Amended and Restated Effective June 10, 2009), incorporated by reference to Exhibit 4.8 to the Company’s Registration Statement on Form S-8 filed on June 9, 2011 (SEC File No. 333-174807). Form of Non-Qualified Stock Option Agreement under the Newpark Resources, Inc. 2006 Equity Incentive Plan (As Amended and Restated Effective June 10, 2009) (as amended), incorporated by reference to Exhibit 4.9 to the Company’s Registration Statement on Form S-8 filed on June 9, 2011 (SEC File No. 333-174807). Form of Non-Qualified Stock Option Agreement under the Newpark Resources, Inc. 2006 Equity Incentive Plan (As Amended and Restated Effective June 10, 2009) (as amended), incorporated by reference to Exhibit 4.10 to the Company’s Registration Statement on Form S-8 filed on June 9, 2011 (SEC File No. 333-174807). Form of Restricted Stock Agreement under the Newpark Resources, Inc. 2006 Equity Incentive Plan (As Amended and Restated Effective June 10, 2009) (as amended), incorporated by reference to Exhibit 4.11 to the Company’s Registration Statement on Form S-8 filed on June 9, 2011 (SEC File No. 333-174807). Form of Restricted Stock Agreement under the Newpark Resources, Inc. 2006 Equity Incentive Plan (As Amended and Restated Effective June 10, 2009) (as amended), incorporated by reference to Exhibit 4.12 to the Company’s Registration Statement on Form S-8 filed on June 9, 2011 (SEC File No. 333-174807). Employment Agreement, dated October 18, 2011, by and between Newpark Resources, Inc. and Gregg Steven Piontek, incorporated by reference to the Company’s Current Report on Form 8-K filed on October 21, 2011 (SEC File No. 001-02960). Indemnification Agreement, dated October 26, 2011, between Gregg S. Piontek and Newpark Resources, Inc., incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 31, 2011 (SEC File No. 001-02960). Form of Restricted Stock Unit for Participants Outside the United States under the 2006 Equity Incentive Plan (As Amended and Restated Effective June 10, 2009) (as amended), incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on July 27, 2012 (SEC File No. 001-02960). Form of Non-Qualified Stock Option Agreement for Participants Outside the United States under the 2006 Equity Incentive Plan (As Amended and Restated Effective June 10, 2009) (as amended), incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed on July 27, 2012 (SEC File No. 001-02960). Amendment to Employment Agreement, dated December 31, 2012, between Mark Airola and Newpark Resources, Inc., incorporated by reference to the Company’s Current Report on Form 8-K filed on January 4, 2013 (SEC File No. 001-02960). Amendment to Employment Agreement, dated December 31, 2012, between Bruce Smith and Newpark Resources, Inc., incorporated by reference to the Company’s Current Report on Form 8-K filed on January 4, 2013 (SEC File No. 001-02960). Membership Interests Purchase Agreement, dated February 10, 2014, by and among Newpark Resources, Inc., Newpark Drilling Fluids LLC and ecoserv, LLC, incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed on April 25, 2014 (SEC File No. 001-02960). Newpark Resources, Inc. 2014 Non-Employee Directors’ Restricted Stock Plan, incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S-8 filed on May 22, 2014 (SEC File No. 333-196164). Form of Non-Employee Director Restricted Stock Agreement under the Newpark Resources, Inc. 2014 Non-Employee Directors’ Restricted Stock Plan, incorporated by reference to Exhibit 4.8 to the Company’s Registration Statement on Form S-8 filed on May 22, 2014 (SEC File No. 333-196164). Form of Indemnification Agreement, incorporated by reference to Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q filed on July 25, 2014 (SEC File No. 001-02960). Third Amended and Restated Credit Agreement dated March 6, 2015 by and among Newpark Resources, Inc., JPMorgan Chase Bank, N.A., as Administrative Agent, Bank of America, N.A., as Syndication Agent, Wells Fargo, National Association, as Documentation Agent, and lenders who are parties thereto, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on March 10, 2015 (SEC File No. 001-02960). Newpark Resources, Inc. 2015 Employee Equity Incentive Plan, incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S-8 filed May 22, 2015 (SEC File No. 333-204403). Form of Restricted Stock Agreement (time vested) under the Newpark Resources, Inc. 2015 Employee Equity Incentive Plan, incorporated by reference to Exhibit 4.8 to the Company’s Registration Statement on Form S-8 filed May 22, 2015 (SEC File No. 333-204403). Form of Restricted Stock Unit Agreement (performance-based) under the Newpark Resources, Inc. 2015 Employee Equity Incentive Plan, incorporated by reference to Exhibit 4.9 to the Company’s Registration Statement on Form S-8 filed May 22, 2015 (SEC File No. 333-204403). Form of Restricted Stock Unit Agreement (retirement eligible) under the Newpark Resources, Inc. 2015 Employee Equity Incentive Plan, incorporated by reference to Exhibit 4.10 to the Company’s Registration Statement on Form S-8 filed May 22, 2015 (SEC File No. 333.204403). Form of Restricted Stock Unit Agreement (not retirement eligible) under the Newpark Resources, Inc. 2015 Employee Equity Incentive Plan, incorporated by reference to Exhibit 4.11 to the Company’s Registration Statement on Form S-8 filed May 22, 2015 (SEC File No. 333.204403). Form of Restricted Stock Unit Agreement (international) under the Newpark Resources, Inc. 2015 Employee Equity Incentive Plan, incorporated by reference to Exhibit 4.12 to the Company’s Registration Statement on Form S-8 filed May 22, 2015 (SEC File No. 333.204403). Form of Non-Qualified Stock Option Agreement (retirement eligible) under the Newpark Resources, Inc. 2015 Employee Equity Incentive Plan, incorporated by reference to Exhibit 4.13 to the Company’s Registration Statement on Form S-8 filed May 22, 2015 (SEC File No. 333.204403). Form of Non-Qualified Stock Option Agreement (not retirement eligible) under the Newpark Resources, Inc. 2015 Employee Equity Incentive Plan, incorporated by reference to Exhibit 4.14 to the Company’s Registration Statement on Form S-8 filed May 22, 2015 (SEC File No. 333.204403). Form of Non-Qualified Stock Option Agreement (international) under the Newpark Resources, Inc. 2015 Employee Equity Incentive Plan, incorporated by reference to Exhibit 4.15 to the Company’s Registration Statement on Form S-8 filed May 22, 2015 (SEC File No. 333.204403). First Amendment to Third Amended and Restated Credit Agreement, dated December 18, 2015, by and among Newpark Resources, Inc., JPMorgan Chase Bank, N.A., as Administrative Agent, Bank of America, N.A., as Syndication Agent, Wells Fargo Bank, National Association, as Documentation Agent, and the lenders who are parties thereto, incorporate by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed December 21, 2015 (SEC File No. 001-02960). Amendment to Amended and Restated Employment Agreement dated as of February 16, 2016, between Newpark Resources, Inc. and Paul L. Howes, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 18, 2016 (SEC File No. 001-02960). Amendment to Employment Agreement dated as of February 16, 2016 between Newpark Resources, Inc. and Gregg S. Piontek, incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on February 18, 2016 (SEC File No. 001-02960). Amendment to Employment Agreement dated February 16, 2016 between Newpark Resources, Inc. and Bruce C. Smith, incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on February 18, 2016 (SEC File No. 001-02960). Amendment to Employment Agreement dated February 16, 2016 between Newpark Resources, Inc. and Mark J. Airola, incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on February 18, 2016 (SEC File No. 001-02960). Amendment to Employment Agreement dated February 16, 2016 between Newpark Resources, Inc. and Jeffery L. Juergens, incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed on February 18, 2016 (SEC File No. 001-02960). Subsidiaries of the Registrant. Consent of Independent Registered Public Accounting Firm. Certification of Paul L. Howes pursuant to Rule 13a-14 or 15d-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Certification of Gregg S. Piontek pursuant to Rule 13a-14 or 15d-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Certification of Paul L. Howes pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Certification of Gregg S. Piontek pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Reporting requirements under the Mine Safety and Health Administration. XBRL Instance Document XBRL Schema Document XBRL Calculation Linkbase Document XBRL Label Linkbase Document XBRL Presentation Linkbase Document XBRL Definition Linkbase Document20152016PART I 3ITEM 1. Business ITEM 1A.Risk Factors 6 13 13 13 15 15 15 18 19 38 39 73 73 75 75 75 75 75 75ITEM 14.Principal Accounting Fees and Services 75PART IV 76 Exhibits76 Signatures82ITEM 1.Businessoil and gas industry supplier providing products and services primarily to the oil and gas exploration and production (“E&P”) industry. We operate our business through two reportable segments: Fluids Systems and Mats and Integrated Services. Our Fluids Systems segment provides customized drilling fluids solutionsproducts and technical services to E&P customers globally, operating through four geographic regions:in the North America, Europe, the Middle East and Africa (“EMEA”), Latin America and Asia Pacific.Pacific regions. Our Mats and Integrated Services segment provides composite mat rentals as well siteas location construction and related site services to oil and gas customers at well, production, transportation and refinery locations in the United States (“U.S.”). In addition, mat rental and services activity is expanding into applications in other markets, including electrical transmission & distribution, pipeline, solar, petrochemical and construction industries including petrochemicals, utilities,across the U.S., Canada and pipeline.United Kingdom. We also manufacture and sell composite mats to E&P customers outside of the U.S., and to domestic customers outside of the oil and gas industry.exploration market. In March 2014, we completed the sale of our Environmental Services business, which was historically reported as a third operating segment. For a detailed discussion of this matter, see “Note 214 - Discontinued Operations” toin our Notes to Consolidated Financial Statements included in Item 8. Financial Statements and Supplementary Data.StartingBeginning in the fourth quarter of 2014 and continuing throughout 2015 and into the first quarter ofearly 2016, the price of oil declined dramatically from the price levels in recent years. As a result, E&P drilling activity has significantly declined in North America and many global markets over this period. While oil prices have since improved from the lows reached in the first quarter of 2016, price levels remain lower than in recent years. The most widely accepted measure of activity for our North American operations is the Baker Hughes Rotary Rig Count. The average North America rig count was 639 in 2016, compared to 1,170 in 2015, compared toand 2,241 in 2014,2014. The North America rig count continually declined in 2015 and 2,114early 2016, reaching a low point of 447 in 2013. The weakness in North American rig activityMay 2016, and has continued into 2016, andsince recovered to 1,082 as of February 19,17, 2017. With the improvement in rig counts from the lows reached in May 2016, the North American rig count was at 720. The loweraverage activity levels are expected to improve in 2017 compared to 2016 but remain below prior year levels for the foreseeable future.and negatively impacted customer pricing and resulted in our North American operations in 2015. The lower customer demand and elevated costs associated with workforce reductions, all of which negatively impacted our profitability in 2015.profitability. Further, due to the fact that our business contains highsubstantial levels of fixed costs, including significant facility and personnel expenses, North American operating margins in both operating segments arehave been negatively impacted by the lower customer demand.Australia, and India,Australia, has declined dramatically following the decline in oil prices, our international activities in the EMEA region have continued to grow in recent years, driven by geographical expansion into new geographic markets, as well as market share gains in existing markets.offersprovides drilling fluids products and technical services to customers in the North America, EMEA, Latin America, and Asia Pacific regions. We offer customized solutions includingfor highly technical drilling projects involving complex subsurface conditions such as horizontal, directional, geologically deep or deep water drilling. These projects require increased monitoring and critical engineering support of the fluids system during the drilling process. We provide drilling fluids products and technical services to markets in North America, EMEA, Latin America, and Asia Pacific regions. Our Fluids Systems business also historically included a completion services and equipment rental business; however, during the fourth quarter of 2013, we completed the sale of substantially all of the assets of this business.the patent rights toin a family of high-performance water-based fluids systems, which we market as Evolution®, DeepDrill®, and FlexDrill™ systems, which are designed to enhance drilling performance and provide environmental benefits. Proprietary technology and systems are an important aspect of our business strategy. We also rely on a variety of unpatented proprietary technologies and know-how in many of our applications. We believe that our reputation in the industry, the range of services we offer, ongoing technical development and know-how, responsiveness to customers and understanding of regulatory requirements are of equal or greater competitive significance than our existing proprietary rights. Halliburton and Baker Hughes, which compete vigorously on fluids performance and/or price. In addition, these companies have broad product and service offerings in addition to their drilling fluids. We also have smaller regional competitors competing with us mainly on price and local relationships. We believe that the principal competitive factors in our businesses include a combination of technical proficiency, reputation, price, reliability, quality, breadth of services offered and experience. We believe that our competitive position is enhanced by our proprietary products and services.2015,2016, approximately 54%60% of segment revenues were derived from the 20 largest segment customers, and 51%38% of segment revenues were generated domestically. For the year ended December 31, 2016, revenue from Sonatrach, our primary customer in Algeria, was approximately 17% of our segment revenues and 14% of our consolidated revenues. Typically, we perform services either under short-term standard contracts or under “master” service agreements. As most agreements with our customers can be terminated upon short notice, our backlog is not significant. We do not derive a significant portion of our revenues from government contracts. See “Note 12 - Segment and Related Information” in Item 8.our Consolidated Financial Statements and Supplementary Data for additional information on financial and geographic data.third partythird-party sales. Our mats provide environmental protection and ensure all-weather access to sites with unstable soil conditions. We sell composite mats direct to customers in areas around the world where we do not maintain an infrastructure for our mat rental activities. In addition, we provide mat rentals to E&P customers in the Northeast U.S., onshore U.S. Gulf Coast,E&P, electrical transmission & distribution, pipeline, solar, petrochemical and Rocky Mountain Regions, and to non-E&P customers inconstruction industries across the U.S., Canada and the United Kingdom. We also offer location construction and related well site services to E&P customers, primarily in the U.S. Gulf Coast Region. region. We recently began offeringcontinue to expand our product offerings, which now include the EPZ Grounding System™ for enhanced safety and efficiency for contractors working on power line maintenance and construction projects and the Defender™ spill containment system to provide customers with an alternative to the use of plastic liners for spill containment andcontainment.EPZ Grounding System™ for enhanced safety and efficiency for contractors working on power line maintenance and construction projects.remained focused in principalon oil and gas industryexploration markets outside the U.S., as well as markets outside the E&P sector in the U.S. and Europe. We believe these mats have worldwide applications outside our traditional oilfield market, primarily in infrastructure construction, maintenance and upgrades of pipelines and electric utility transmission lines, and as temporary roads for movement of oversized or unusually heavy loads. In late 2013, we announced plans to significantly expand our manufacturing facility, in order to support our efforts to expand our markets globally. This project wasglobally, we completed an expansion of our mats manufacturing facility in 2015 which nearly doubled our manufacturing capacity and significantly expanded our research and development capabilities. and equipment used in our business are adequate for our needs. We are not dependent upon any one supplier and we have encountered no serious shortages or delays in obtaining any raw materials. The resins, chemicals and other materials used to manufacture composite mats are widely available. Resin is the largest raw material component in the manufacturing of our composite mat products.Defender spill containment system and the EPZ Grounding System).UsingSystem™ and the Defender™ spill containment system). Using proprietary technology and systems is an important aspect of our business strategy. We believe that these products provide us with a distinct advantage over our competition. We believe that our reputation in the industry, the range of services we offer, ongoing technical development and know-how, responsiveness to customers and understanding of regulatory requirements also have competitive significance in the markets we serve.Competition — Our market is fragmented and competitive, with many competitors providing various forms of site preparation products and services. The mat sales component of our business is not as fragmented as the rental and services segment with only a few competitors providing various alternatives to our DURA-BASE mat products, such as Signature Systems Group and Checkers Group. This is due to many factors, including large capital start-up costs and proprietary technology associated with this product. We believe that the principal competitive factors in our businesses include product capabilities, price, reputation, and reliability. We also believe that our competitive position is enhanced by our proprietary products, services and experience.integratedinfrastructure construction and independent oil and gas E&P companies operating in the markets that we serve. Approximately 72%56% of our segment revenues in 20152016 were derived from the 20 largest segment customers, of which, the largest customer represented 16%11% of our segment revenues. As a result of our recent efforts to expand beyond our traditional oilfield customer base, revenues from non-explorationnon E&P customers increasedcontinued to increase in 20152016 and represented approximately 44%70% of segment revenues in 2015, as compared to approximately 25% in 2014.2016. Typically, we perform services either under short-term contracts or rental service agreements. As most agreements with our customers are cancelable upon short notice, our backlog is not significant. We do not derive a significant portion of our revenues from government contracts. See “Note 12 - Segment and Related Information” in Item 8.our Consolidated Financial Statements and Supplementary Data for additional information on financial and geographic data.214 - Discontinued Operations” in our Notes to Consolidated Financial Statements included in Item 8. Financial Statements and Supplementary Data.2016,2017, we employed approximately 1,9801,800 full and part-time personnel none of which are represented by unions. We consider our relations with our employees to be satisfactory.ITEM 1A.Risk Factorshave adversely affectedaffect the demand for our services and consequently, our revenue and operating resultsresults; and a continuationthe presence of these market conditions will continue to negatively affectaffects our revenue and operating results. The key risk factors that we believe influence the worldwide oil and natural gas markets are discussed below.has reduced and incremental weakness could continue to reduce demand for oilandoil and natural gas and result in lower oil and natural gas prices. In addition, demand for oil and natural gas could be impacted by environmental regulation, including cap and trade legislation, regulation of hydraulic fracturing, and carbon taxes. Weakness or deterioration of the global economy or credit markets could reduce our customers’ spending levels and reduce our revenue and operating results.explorationcompanies.exploration companies. Oil and natural gas storage inventory levels are indicators of the relative balance between supply and demand. Supply can also be impacted by the degree to which individual Organization of Petroleum Exporting Countries (“OPEC”) nations and other large oil and natural gas producing countries are willing and able to control production and exports of hydrocarbons, to decrease or increase supply and to support their targeted oil price or meet market share objectives. Any of these factors could affect the supply of oil and natural gas and could have a material effect on our results of operations.tofundto fund exploration and development activities. Since lateCompared to 2011 to 2014 levels, oil prices have declined significantly due in large part to increasing supplies, weakening demand growth and OPEC’s positionthe decision by OPEC countries to not cut production.maintain production levels throughout 2015 and most of 2016. Expectations about future commodity prices and price volatility are important for determining future spending levels.Lower oil andnatural gas prices generally lead to decreased spending by our customers. Our customers also take into account the volatility of energy prices and other risk factors by requiring higher returns for individual projects if there is higher perceived risk.2015,2016, approximately 49%53% of our consolidated revenues were derived from our 20 largest customers, although no singlewhich includes 14% from Sonatrach, our primary customer accounted for more than 10% of our consolidated revenues.in Algeria. In addition, approximately 57%45% of our consolidated revenues were derived from our U.S. operations.the fourth quarter oflate 2014 and continuing throughthroughout 2015 and into early 2016, the price forof oil has declined dramatically from the price levels in recent years. While oil prices have since improved from the lows reached in the first quarter of 2016, price levels remain lower than in recent years and there are no assurances that the price for oil will not continue tofurther decline. Following this decline, North American drilling activity has decreased significantly, which has reduced the demand for our services and negatively impacted customer pricing in our North American operations. Due to these changes, our quarterly and annual operating results have been negatively impacted and may continue to fluctuate in future periods. Because our business has highsubstantial fixed costs, including significant facility and personnel expenses, downtime or low productivity due to reduced demand can have a significant adverse impact on our profitability.▪ difficulties and cost associated with complying with a wide variety of complex foreign laws, treaties and regulations; ▪ uncertainties in or unexpected changes in regulatory environments or tax laws; ▪ legal uncertainties, timing delays and expenses associated with tariffs, export licenses and other trade barriers; ▪ difficulties enforcing agreements and collecting receivables through foreign legal systems; ▪ risks associated with failing to comply with the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act, export laws, and other similar laws applicable to our operations in international markets; ▪ exchange controls or other limitations on international currency movements; ▪ sanctions imposed by the U.S. government that prevent us from engaging in business in certain countries or with certain counter-parties; ▪ inability to obtain or preserve certain intellectual property rights in the foreign countries in which we operate; ▪ our inexperience in certain international markets; ▪ fluctuations in foreign currency exchange rates; ▪ political and economic instability; and ▪ acts of terrorism. creditloan agreements is dependent upon our ability to continue generatinggenerate operating income and remain in compliance with the covenants in our creditdebt agreements. This, in turn, is subject to the volatile nature of the oil and natural gas industry, and to competitive, economic, financial and other factors that are beyond our control.December 2015,May 2016, we entered into a First Amendmentnew asset-based revolving credit agreement, as amended in February 2017, (the “ABL Facility”). Borrowing availability under the ABL Facility is calculated based on eligible accounts receivable, inventory, and, subject to satisfaction of certain financial covenants as described below, composite mats included in the rental fleet, net of reserves and limits on such assets included in the borrowing base calculation. To the extent pledged by us, the borrowing base calculation shall also include the amount of eligible pledged cash. The lender may establish reserves, in part based on appraisals of the asset base, and other limits at its discretion which could reduce the amounts otherwise available under the ABL Facility. Availability associated with eligible rental mats will also be subject to maintaining a minimum consolidated fixed charge coverage ratio and a minimum level of operating income for the Mats and Integrated Services segment. The availability under the ABL Facility is expected to fluctuate directionally with changes in our Third Amendeddomestic accounts receivable, inventory, and Restated Credit Agreementcomposite mat rental fleet.Amendment”Convertible Notes due 2017”), amending provisions have not either been repurchased, redeemed, converted or we have not provided sufficient funds to repay the Convertible Notes due 2017 in full on their maturity date. For this purpose, funds may be provided in cash to an escrow agent or a combination of cash to an escrow agent and the assignment of a portion of availability under the ABL Facility. The ABL Facility requires compliance with a minimum fixed charge coverage ratio and minimum unused availability of $25.0 million to utilize borrowings or assignment of availability under the ABL Facility towards funding the repayment of the 2017 Convertible Notes. We intend to use available cash on-hand, cash generated by operations, including U.S. income tax refunds, and estimated availability under our existing Third AmendedABL Facility to repay the remaining Convertible Notes due 2017. If the timing of the U.S. income tax refunds are delayed and Restated Credit Agreement (“Credit Agreement”). The Amendment was principally entered into asthe other sources described above are not sufficient to repay the remaining Convertible Notes due 2017, we could seek other financing alternatives to satisfy the funding requirement for the Convertible Notes due 2017. If we are unable to satisfy the funding requirement for the Convertible Notes due 2017, this could have a resultmaterial adverse effect on our business and financial condition.our anticipation of non-compliancemore than $25.0 million, or if we fail to comply with the consolidated leverage ratio financial covenant under our Credit Agreement. While no amounts are currently outstanding under our Credit Agreement, a breachvarious covenants and other requirements of anythe ABL Facility, including the June 30, 2017 funding requirement for the Convertible Notes due 2017, we would be in default thereunder, which would permit the holders of these covenants would result in a default under the Credit Agreementindebtedness to accelerate the maturity thereof, unless we are able to obtain, on a timely basis, thea necessary waiver or amendment to the Credit Agreement.amendment. Any waiver or amendment to our Credit Agreement may require us to revise the terms of our Credit Agreementagreements which could increase the cost of our borrowings, require the payment of additional fees, and adversely impact the results of our operations. Upon the occurrence of any event of default under the Credit Agreement that is not waived, the lenders could elect to exercise any of their available remedies, which include the right to not lend any additional amounts or, in the event we have outstanding indebtedness under the Credit Agreement,ABL Facility, to declare any outstanding indebtedness, together with any accrued interest and other fees, to be immediately due and payable. If we are unable to repay the outstanding indebtedness, if any, under the Credit AgreementABL Facility when due, the lenders would be permitted to proceed against their collateral. In the event any outstanding indebtedness in excess of $25$25.0 million is accelerated, this could also cause aan event of default under our unsecuredConvertible Notes due 2017 and our convertible senior notes.notes due 2021 (“Convertible Notes due 2021”). The acceleration of any of our indebtedness and the election to exercise any such remedies could have a material adverse effect on our business and financial condition.Risks Related to International OperationsWe have significant operations outside of the United States, including certain areas of Canada, EMEA, Latin America, and Asia Pacific. In 2015, these international operations generated approximately 43% of our consolidated revenues. In addition, we may seek to expand to other areas outside the United States in the future. International operations are subject to a number of risks and uncertainties, including:■difficulties and cost associated with complying with a wide variety of complex foreign laws, treaties and regulations■uncertainties in or unexpected changes in regulatory environments or tax laws■legal uncertainties, timing delays and expenses associated with tariffs, export licenses and other trade barriers■difficulties enforcing agreements and collecting receivables through foreign legal systems■risks associated with failing to comply with the Foreign Corrupt Practices Act, export laws, and other similar U.S. laws applicable to our operations in international markets■exchange controls or other limitations on international currency movements■sanctions imposed by the U.S. government that prevent us from engaging in business in certain countries■inability to obtain or preserve certain intellectual property rights in the foreign countries in which we operate■our inexperience in new international markets■fluctuations in foreign currency exchange rates■political and economic instability■acts of terrorismIn addition, several North African markets in which we operate, including Tunisia, Egypt, Libya, and Algeria have experienced social and political unrest in past years, which negatively impacted our operating results, including the temporary suspension of our operations. More recently in Brazil, a widely-publicized corruption investigation has led to disruptions in Petrobras’ operations.2016,2017, our capital expenditures are expected to be approximately $30range between $15.0 million to $45$20.0 million (exclusive of any acquisitions), including additional investmentsexpenditures for the completion of the facility upgrade and expansion of our Fourchon, Louisiana facility serving the Gulf of Mexico deepwater market as well as infrastructure investments required to supportin the expansion of our international operations.Fluids Systems segment. These investments are subject to a number of risks and uncertainties, including:■▪ assets▪ ■manner▪ ■priorities▪ ■system▪ ■projectprojects mentioned aboveresult in a reduction inrestrict industry activity or our inabilityability to meet customer’s needs.theour DURA-BASE mat.mats. The cost of HDPE can vary significantly based on the energy costs of the producers of HDPE, demand for this material, and the capacity/operations of the plants used to make HDPE. Should our cost of HDPE increase, we may not be able to increase our customer pricing to cover our costs, which may result in a reduction in future profitability. very competitive, and if we cannot attract and retain quality personnel, our ability to compete effectively and to grow our business will be severely limited. Also, a significant increase in the wages paid by competing employers could result in a reduction in our skilled labor force or an increase in our operating costs.current weakness in the North American drilling activity in recent years has resulted in significant reductions in pricing from many of our competitors, in both in the Fluids Systems and Mats and Integrated Services segment.localforeign laws, regulations and policies that govern environmental protection, zoning and other matters applicable to our current and past business activities, including the activities of our former subsidiaries. Failure to remain compliant with these laws, regulations and regulationspolicies may result in, among other things, fines, penalties, costs of cleanup of contaminated sites and site closure obligations, or other expenditures. Further, any changes in the current legal and regulatory environment could impact industry activity and the demands for our products and services, the scope of products and services that we provide, or our cost structure required to provide our products and services, or the costs incurred by our customers.hasand other domestic and foreign regulatory agencies have adopted regulations that potentially limit greenhouse gas emissions and impose reporting obligations on large greenhouse gas emission sources. In addition, the EPA has adopted rules that could require the reduction of certain air emissions during exploration and production of oil and gas. To the extent that laws and regulations enacted as part of climate change legislation increase the costs of drilling for or producing such fossil fuels, limit or restrict oil and natural gas exploration and production, or reduce the demand for fossil fuels, such legislation could have a material adverse impact on our operations and profitability.has commenced a study ofis studying the potential impact of hydraulic fracturing on drinking water including impacts from the disposal of waste fluid by underground injection. Further, the EPA has announced plans to develop effluent limitations associated with wastewater generated by hydraulic fracturing. Although we do not provide hydraulic fracturing services and our drilling fluids products are not used in such services, regulations which have the effect of limiting the use or availabilitysignificantly increasing the costs of hydraulic fracturing, could have a significant negative impact on the drilling activity levels of our customers, and, therefore, the demand for our products and services.■▪ responsibility▪ ■pollution▪ ■limits▪ ■policies2015,2016, our consolidated balance sheet includes $19.0$20.0 million in goodwill related to our Mats and Integrated Services segment and $11.1$6.1 million of intangible assets, net. Goodwill and indefinite-lived intangible assets are tested for impairment annually, or more frequently as the circumstances require, using a combination of market multiple and discounted cash flow approaches. In completing this annual evaluation duringDuring the fourth quarter of 2015, we determined that our drilling fluids reporting unit had a fair value below its net carrying value, and anwe recognized a goodwill impairment of $70.7 million. During the second quarter of 2016, we recognized a $3.1 million was recognized, charge to fully impair the goodwillcustomer related tointangible assets for the drilling fluids reporting unit. Asia Pacific region. early 2016, oil and natural gas prices and U.S. drilling activity remainremained significantly below the levels of recent years. Continued softeningAlthough activity levels have improved in the second half of 2016 and early 2017, continued weakness or volatility in market conditions may further deteriorate the financial performance or future projections for our operating segments from current levels, which may result in an impairment of goodwill or indefinite-lived intangible assets and negatively impact our financial results in the period of impairment.The company hasWe have policies and procedures in place, including system monitoring and data back-up processes, to prevent or mitigate the effects of these potential disruptions or breaches, however there can be no assurance that existing or emerging threats will not have an adverse impact on our systems or communications networks. These risks could harm our reputation and our relationships with our customers, business partners, employees or other third parties, and may result in claims against us. In addition, these risks could have a material adverse effect on our business, consolidated results of operations, and consolidated financial condition.Risks Related to Severe Weather, Particularly in the U.S. Gulf CoastApproximately 12% of our consolidated revenue from continuing operations in 2015 was generated in market areas in the U.S. Gulf of Mexico and related near-shore areas, which are susceptible to hurricanes and other adverse weather events. These weather events can disrupt our operations and result in damage to our properties, as well as negatively impact the activity and financial condition of our customers. Our business may be adversely affected by these and other negative effects of future hurricanes or other adverse weather events in regions in which we operate.ITEM 1B.Unresolved Staff CommentsITEM 2.PropertiesThird Amended and Restated Credit Agreement, as amended (“Credit Amendment”).102,685103,000 square feet of office space on approximately 11 acres of land in Katy, Texas, which houses the divisional headquarters and technology center for this segment. We also own a distribution warehouse and fluids blending facility containing approximately 65,000 square feet of office and industrial space on approximately 21 acres of land in Conroe, Texas. Additionally, we own eightsix warehouse facilities and have 1815 leased warehouses and 1210 contract warehouses to support our customers and operations in the U.S. We own two warehouse facilities and have 1519 contract warehouses in Western Canada to support our Canadian operations. Additionally, we lease 1819 warehouses and own one warehouse in the EMEA region, lease sixfive warehouses in the Latin America region, and own one warehouse and lease ninefive warehouses in the Asia Pacific region to support our international operations. This leased space is located in several cities throughout Texasprimarily in the United States, Canada, Italy, Eastern Europe, North Africa, Kuwait, Brazil, and Louisiana, Denver, Colorado, Calgary, Alberta, Rome, Italy and Rio de Janeiro, Brazil.Australia. We also own buildings providing office space in Oklahoma City, Oklahoma and office/warehouse space in Henderson, Australia. Some of thesethe warehouses listed also include blending facilities as well.facilities.sixeight sites throughout Texas, Louisiana,Pennsylvania, Colorado, WisconsinIllinois and PennsylvaniaWisconsin which serve as bases for our well site service activities. Additionally, we own two facilities which are located in Louisiana and Texas and lease two facilities in the United Kingdom to support field operations.ITEM 3.Legal ProceedingsLLC.LLC. On June 18, 2014, Jesse Davida, a former employee of Newpark Drilling Fluids LLC, filed a purported class action lawsuit in the U.S. District Court for the Western District of Texas, San Antonio Division, alleging violations of the Fair Labor Standards Act (“FLSA”). The plaintiff seekssought damages and penalties for the Company’sour alleged failure to:to properly classify its fluidour field service employees as “non-exempt” under the FLSA;FLSA and pay them on an hourly basis (including overtime). The plaintiff seeks recovery on his own behalf, and seeks certification of a class of similarly situated employees. On January 6, 2015, the Court granted the plaintiff’s motion to “conditionally” certify the class of fluid service technicians that have worked for Newpark Drilling Fluids over the priorpast three years. Notification was given to 658 current and former fluid service technician employees of Newpark regarding this litigation and those individuals were given the opportunity to “opt-in” to the Davida litigation. The opt-in period closed in early May of 2015 and a total of 91 individuals joined the Davida litigation. Counsel for the plaintiffs moved to add state law class action claims for current and former fluid service technicians that worked for Newpark Drilling Fluids in New York, North Dakota, Ohio and Pennsylvania. The Court granted the motion, but gave Newpark the right to file a motion to dismiss these state law claims, and that motion is pending. Among other reasons, we sought dismissal of those state law claims on the basis that an insufficient number of employees are located in those states to support a class action. We expect that the effect of the additional state law claims (excluding New York and Ohio claims) would be to include in the litigation approximately 48 current and former fluid services technicians who worked in Pennsylvania, and approximately 41 current and former fluid services technicians who worked in North Dakota. Discovery is in process with the trial currently being scheduled for September 2016.LLC.LLC. On November 11, 2014, Josh Christiansen (represented by the same counsel that representsas Davida) filed a purported class action lawsuit in the U.S. District Court for the Southern District of Texas, Houston Division, alleging violations of the FLSA. The plaintiff seekssought damages and penalties for the Company’sour alleged failure to:to properly classify him as an employee rather than an independent contractor; properly classify itsour field service employees as “non-exempt” under the FLSA; and, pay them on an hourly basis (including overtime) and seekssought damages and penalties for the Company’sour alleged failure to pay him and the others in the proposed class on an hourly basis (including overtime). Following the filing of this lawsuit, five additional plaintiffs joined the proceedings. The plaintiff seeks recovery on his own behalf, and sought certification of a class of similarly situated individuals. In March of 2015, the Court denied the plaintiffs’ motion for conditional class certification. Counsel for the plaintiffs did not appeal that ruling and have nowsubsequently filed individual cases for each of the original opt-in plaintiffs plus two new plaintiffs, leaving a total of eight separate independent contractor cases pending. Preliminary discovery has occurred in these cases.plaintiff’splaintiffs in the Davida and theChristiansenChristiansen-related cases filed two additional individual FLSA cases on behalf of former fluid service technician employees. These cases are similar in nature to theDavidacase discussed above.Pending Resolution of Wage and Hour Litigation.Beginning in November 2015, we engaged in settlement discussions with counsel for the plaintiffs in the pending wage and hour litigation cases described above. As a result of the then ongoing settlement negotiations, we recognized a $5.0 million charge in the fourth quarter of 2015 related to the resolution of these wage and hour litigation claims. Following mediation in January of 2016, the parties reached anexecuted a settlement agreement in April 2016 to settleresolve all of the pending matters, subject to a number of conditions, including approval by the Court in theDavida case, and the dismissal of the other FLSA cases (Christiansen-related(Christiansen-related lawsuits and individual FLSA cases). Subject to these conditions,The settlement agreement was approved by the Davida Court on August 19, 2016. Approximately 569 current and former fluid service technician employees that are eligible for the settlement will bewere notified of the pending resolution beginning on August 26, 2016 and given an opportunity to participate in the settlement. The amount paid to any eligible individual will varyvaried based on a formula that takes into account the number of workweeks and salary for the individual during the time period covered by the settlement (which can vary based upon several factors).settlement. Any eligible individual that electselected to participate in the settlement will releasereleased all wage and hour claims against us.Company.settlement represented approximately 67% of the individuals receiving notice. Individuals that did not participate in the settlement may retain the right to file an individual lawsuit against us, subject to any defenses we may assert. As a result of the settlement negotiations,agreement, we recognized a $5.0funded the $4.5 million charge settlement amount into the settlement fund in the fourth quarter of 2015 related to the pending resolution of these wage and hour litigation claims, which is included in impairments and other charges. We expect to fund the settlement amount in the firstsecond half of 2016, subject to the conditions described above.2016. The settlement fund will bewas administered by a third party who will makemade payments to eligible individuals that electelected to participate in accordance with a formula incorporated into the pending settlement agreement. In addition, under the terms of the pending settlement agreement, if settlement funds remainthat remained after all payments arewere made to eligible individuals that electelected to participate in the settlement such excess amount will bewere shared by the participating individuals and Newpark Drilling Fluids. Theus. In the fourth quarter of 2016, we recognized a $0.7 million gain associated with the change in final settlement amount of excess funds, if any, is not currently determinable.these wage and hour litigation claims.Inc.Inc. v. Ecoserv,LLC. On July 13, 2015, we filed a declaratory action in the District Court in Harris County, Texas (80th Judicial District) seeking release of $8$8.0 million of funds placed in escrow by Ecoserv LLC (“Ecoserv”) in connection with its 2014 purchase of our Environmental Services business. Ecoserv has filed a counter claimcounterclaim asserting that we breached certain representations and warranties contained in the purchase/sale agreement including, among other things, the condition of certain assets. In addition, Ecoserv has alleged that Newpark committed fraud in connection with the sale transaction.$8$8.0 million of the sales price was withheld and placed in an escrow account to satisfy claims for possible breaches of representations and warranties contained in the sale agreement. For the amount withheld in escrow, $4$4.0 million was scheduled for release to Newpark at each of the nine-month and 18-month anniversary of the closing. In December 2014, we received a letter from counsel for Ecoserv asserting that we had breached certain representations and warranties contained in the sale agreement;agreement including failing to disclose service work performed on injectioninjection/disposal wells and increased barge rental costs. The letter indicated that Ecoserv expected the costs associated with these claims to exceed the escrow amount. Following a further exchange of letters, in July of 2015, we filed the declaratory judgment action against Ecoserv referenced above. We believe there is no basis in the agreement or on the facts to support the claims asserted by Ecoserv and intend to vigorously defend our position while pursuing release of the entire $8$8.0 million escrow. Discovery has commenced betweenThe litigation remains in the parties.ITEM 4.Mine Safety DisclosuresITEM 5.Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities $ 6.60 $ 4.83 $ 8.03 $ 5.09 $ 10.61 $ 7.43 $ 9.85 $ 8.34 $ 12.65 $ 8.23 $ 13.60 $ 11.50 $ 12.65 $ 10.90 $ 12.56 $ 10.43 Period High Low 2016 Fourth Quarter $ 8.20 $ 5.80 Third Quarter $ 7.72 $ 5.48 Second Quarter $ 5.89 $ 3.74 First Quarter $ 5.47 $ 3.35 2015 Fourth Quarter $ 6.60 $ 4.83 Third Quarter $ 8.03 $ 5.09 Second Quarter $ 10.61 $ 7.43 First Quarter $ 9.85 $ 8.34 2016,2017, we had 1,4131,390 stockholders of record as determined by our transfer agent.In April 2013,Period Total Number of
Shares Purchased (1) Average Price
per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Approximate Dollar Value of Shares and Convertible Notes due 2017 that May Yet be Purchased Under Plans or Programs October 2016 303 $ 7.30 — $ 33.5 November 2016 — $ — — $ 33.5 December 2016 — — — $ 33.5 Total 303 $ 7.30 — (1) During the three months ended December 31, 2016, we purchased an aggregate of 303 shares surrendered in lieu of taxes under vesting of restricted stock awards. share repurchase program that authorizes the Companyus to purchase up to $50.0$100.0 million of itsour outstanding shares of common stock. This authorization was subsequently increased to $100.0 million in February 2014. In September 2015, our Board of Directors expanded the repurchase program to include the repurchase of our convertible senior notes, in addition tostock or outstanding shares of common stock.Convertible Notes due 2017. The repurchase program has no specific term. The CompanyWe may repurchase shares or convertible senior notesConvertible Notes due 2017 in the open market or as otherwise determined by management, subject to market conditions, business opportunities,certain limitations under our existing Credit Agreementthe ABL Facility and other factors. Repurchases are expected to be funded from operating cash flows and available cash on-hand. Subject to continued covenant compliance, funds could also be available under our existing Credit Agreement for such repurchases. As part of the share repurchase program, the Company’sour management has been authorized to establish trading plans under Rule 10b5-1 of the Securities Exchange Act of 1934.2015.2016. In February 2016, we repurchased $11.2 million of our Convertible Notes due 2017 in the open market for $9.2 million. This repurchase was made under our existing Board authorized repurchase program discussed above. At December 31, 2015,2016, there was $42.7$33.5 million of authorization remaining under the program. In addition, the Board separately authorized the repurchase of $78.1 million of Convertible Notes due 2017 in connection with the December 2016 issuance of $100.0 million of Convertible Notes due 2021. During 2015,2016, we repurchased $2.3 million234,901 of shares surrendered in lieu of taxes under vesting of restricted stock awards. All of the shares repurchased are held as treasury stock.credit facilities containABL Facility contains covenants which prohibitlimit the payment of dividends on our common stock.The following table details our repurchases See “Management's Discussion and Analysis of sharesFinancial Condition and Results of our common stock for the three months ended December 31, 2015:
Shares Purchased as Part
of Publicly Announced
Plans or Programs 7,101 $ 6.19 - $ 42.7 41,950 $ 6.22 - $ 42.7 38,881 5.33 - $ 42.7 87,932 $ 5.82 - (1)During the three months ended December 31, 2015, we purchased an aggregate of 87,932 shares surrendered in lieu of taxes under vesting of restricted stock awards.In February 2016, we repurchased $11.2 million of our convertible senior notes in the open market for $9.2 million. This repurchase was made under our existing Board authorized repurchase program discussed above. As of February 26, 2016, we had $33.5 million of authorization remaining under the program.20112012 through December 31, 2015,2016, with the New York Stock Exchange Market Value Index, a broad equity market index, and the Morningstar Oil & Gas Equipment & Services Index, an industry group index. The graph assumes the investment of $100 on January 1, 20112012 in our common stock and each index and the reinvestment of all dividends, if any. This information shall be deemed furnished not filed, in this Form 10-K, and shall not be deemed incorporated by reference into any filing under the Securities Exchange Act of 1933, or the Securities Act of 1934, except to the extent we specifically incorporate it by reference. 
ITEM 6.Selected Financial Data20152016 is derived from our consolidated financial statements and is not necessarily indicative of results to be expected in the future. In As of and for the Year Ended December 31, (In thousands, except share data) 2016 2015 2014 2013 2012 Consolidated Statements of Operations Data: Revenues $ 471,496 $ 676,865 $ 1,118,416 $ 1,042,356 $ 983,953 Operating income (loss) (57,213 ) (99,099 ) 130,596 94,445 92,275 Interest expense, net 9,866 9,111 10,431 11,279 9,727 Income (loss) from continuing operations (40,712 ) (90,828 ) 79,009 52,622 50,453 Income from discontinued operations, net of tax — — 1,152 12,701 9,579 Gain from disposal of discontinued operations, net of tax — — 22,117 — — Net income (loss) (40,712 ) (90,828 ) 102,278 65,323 60,032 Basic income (loss) per share from continuing operations $ (0.49 ) $ (1.10 ) $ 0.95 $ 0.62 $ 0.58 Basic net income (loss) per share $ (0.49 ) $ (1.10 ) $ 1.23 $ 0.77 $ 0.69 Diluted income (loss) per share from continuing operations $ (0.49 ) $ (1.10 ) $ 0.84 $ 0.56 $ 0.53 Diluted net income (loss) per share $ (0.49 ) $ (1.10 ) $ 1.07 $ 0.69 $ 0.62 Consolidated Balance Sheet Data: Working capital $ 283,139 $ 380,950 $ 440,098 $ 395,159 $ 433,728 Total assets 798,183 848,893 1,007,672 954,918 979,750 Foreign bank lines of credit — 7,371 11,395 12,809 2,546 Other current debt 83,368 11 253 58 53 Long-term debt, less current portion 72,900 171,211 170,462 170,009 253,315 Stockholders' equity 500,543 520,259 625,458 581,054 513,578 Consolidated Cash Flow Data: Net cash provided by operations $ 11,095 $ 121,517 $ 89,173 $ 151,903 $ 110,245 Net cash used in investing activities (28,260 ) (84,366 ) (14,002 ) (60,063 ) (96,167 ) Net cash provided by (used in) financing activities (650 ) (6,730 ) (49,158 ) (72,528 ) 5,853 we elected to early adopt with retrospective application updated authoritative guidance related to the presentation of debt issuance costsoperating loss includes charges totaling $14.8 million and deferred taxes in our consolidated balance sheets. Debt issuance costs related to non-revolving debt arrangements are now presented as a direct deduction$80.5 million, respectively, resulting from the reduction in value of certain assets, the wind-down of our operations in Uruguay and the resolution of certain wage and hour litigation claims. Charges in 2016 include $6.9 million of non-cash impairments in the Asia Pacific region, $4.1 million of charges for the reduction in carrying values of certain inventory, $4.5 million of charges in the Latin America region associated with the wind-down of our operations in Uruguay, partially offset by a $0.7 million gain in 2016 associated with the change in final settlement amount of certain wage and hour litigation claims. Charges in 2015 include a $70.7 million non-cash impairment of goodwill, a $2.6 million non-cash impairment of assets, a $2.2 million charge to reduce the carrying value of inventory and a $5.0 million charge for the resolution of certain wage and hour litigation claims and related debt liability rather than as an asset. In addition, net deferred taxes related to each taxpaying jurisdiction are now presented as either a non-current asset or liability. These presentation changes are reflected in our consolidated balance sheet data for all periods presented below, but did not have any impact on our consolidated financial condition, results of operations or cash flows. $ 676,865 $ 1,118,416 $ 1,042,356 $ 983,953 $ 909,368 (99,099 ) 130,596 94,445 92,275 120,855 9,111 10,431 11,279 9,727 9,226 $ (90,828 ) $ 79,009 $ 52,622 $ 50,453 $ 71,233 - 1,152 12,701 9,579 8,784 - 22,117 - - - $ (90,828 ) $ 102,278 $ 65,323 $ 60,032 $ 80,017 $ (1.10 ) $ 0.95 $ 0.62 $ 0.58 $ 0.79 $ (1.10 ) $ 1.23 $ 0.77 $ 0.69 $ 0.89 $ (1.10 ) $ 0.84 $ 0.56 $ 0.53 $ 0.71 $ (1.10 ) $ 1.07 $ 0.69 $ 0.62 $ 0.80 $ 380,950 $ 440,098 $ 395,159 $ 433,728 $ 394,604 848,893 1,007,672 954,918 979,750 869,753 7,371 11,395 12,809 2,546 2,174 11 253 58 53 58 171,211 170,462 170,009 253,315 185,619 520,259 625,458 581,054 513,578 497,846 $ 121,517 $ 89,173 $ 151,903 $ 110,245 $ (13,558 ) (84,366 ) (14,002 ) (60,063 ) (96,167 ) (63,150 ) (6,730 ) (49,158 ) (72,528 ) 5,853 18,338 (1)During the fourth quarter of 2015, we recorded a total of $80.5 million of charges for the reduction in value of certain assets and the pending resolution of certain wage and hour litigation claims. The Fluids Systems segment operating results include $75.5 million of these charges including a $70.7 million non-cash impairment of goodwill, a $2.6 million non-cash impairment of assets, following our decision to exit a facility, and a $2.2 million charge to reduce the carrying value of diesel-based drilling fluid inventory. In addition, corporate office expenses include a $5.0 million charge for the pending resolution of certain wage and hour litigation claims and related costs. In our 2015 consolidated statement of operations, a total of $78.3 million of these charges are reported in impairments and other charges with the $2.2 million charge for the write-down of inventory being reported in cost of revenues.ITEM 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations oil and gas industry supplier providing products and services primarily to the oil and gas exploration and production (“E&P”) industry. We operate our business through two reportable segments: Fluids Systems and Mats and Integrated Services.214 - Discontinued Operations” in our Notes to Consolidated Financial Statements included in Item 8. Financial Statements and Supplementary Data for additional information.Our Fluids Systems segment, which generated 86% of consolidated revenues in 2015, provides customized drilling fluids solutions to E&P customers globally, operating through four geographic regions: North America, Europe, the Middle East and Africa (“EMEA”), Latin America, and Asia Pacific.In the fourth quarter of 2013, we sold substantially all assets of the completion services and equipment rental business, generating total proceeds of $13.3 million and a gain on disposal of $2.7 million. For the full year 2013, this business generated $16.7 million of revenues and $0.9 million of operating income, including the gain on disposal.International expansion is a key element of our corporate strategy. In 2014, we began work on several international contract awards within the EMEA region. We were awarded a contract to provide drilling fluids and related services for a series of wells in the deepwater Black Sea. In addition, we were awarded two contracts to provide drilling fluids and related services for land operations, including a five year contract with the Kuwait Oil Company (“Kuwait”) and a four year contract with Cairn Energy in India. Total revenue generated under these contracts was approximately $44 million in 2015 and $23 million in 2014. Revenues under these contracts in 2015, as compared to 2014, were negatively impacted by approximately $6 million for currency exchange related to the strengthening U.S. dollar.In 2015, we were awarded three additional international contracts. We were awarded Lot 1 and Lot 3 of a restricted tender by Sonatrach to provide drilling fluids and related services in Algeria. The maximum value of the two lots of the Sonatrach tender is approximately 31 billion Algerian dinar (approximately $290 million at current exchange rates), covering a term of three years. Work under this contract began in the second quarter of 2015 with activity levels ramping-up during the second half of 2015. We were also awarded a contract by ENI S.p.A. to provide drilling fluids and related services for onshore and offshore drilling in the Republic of Congo. The initial term of this contract is three years and includes an option for up to an additional two year extension. Work under this contract began in the fourth quarter of 2015. Total revenue generated under these contracts, including our prior contract with Sonatrach, was approximately $58 million in 2015 compared to $48 million in 2014. Revenues under these contracts in 2015, as compared to 2014, were unfavorably impacted by approximately $13 million for currency exchange related to the strengthening U.S. dollar. In addition, during the third quarter of 2015, we were awardeda contract by Total S.A. to provide drilling fluids and related services for an exploratory ultra-deepwater well in Block 14 of offshore Uruguay. This project is expected to begin late in the first quarter of 2016.In 2016, we have been awarded a two year contract by Shell Oil to provide drilling fluids and related services for onshore drilling activity in Albania. Work under this contract is expected to begin in the second half of 2016.We are continuing to focus on the development and commercialization of new drilling fluids technologies, including Evolution®, our family of high performance water-based drilling fluid systems, which we believe provide superior performance and environmental benefits to our customers, as compared to traditional fluid systems used in the industry. Total revenues from wells using Evolution systems were approximately $105 million in 2015 compared to $251 million in 2014. The decrease in revenues in 2015 is primarily attributable to lower drilling activity as well as customers in North America tending to favor lower-cost product offerings in the current market environment.In 2014, we announced two capital investment projects within the Fluids Systems segment. Since then, we invested approximately $20 million in a new fluids blending facility and distribution center located in Conroe, Texas, which will support the manufacturing of our proprietary fluid technologies, including our Evolution systems. This project was substantially completed in 2015 with the start-up of blending operations in early 2016. In addition, we are investing approximately $30 million to significantly expand existing capacity and upgrade the drilling fluids blending, storage, and transfer capabilities in Fourchon, Louisiana, which serves the Gulf of Mexico deepwater market. This project is expected to be completed in 2016. Capital expenditures related to these projects totaled $26.1 million and $3.9 million in 2015 and 2014, respectively.Our Mats and Integrated Services segment, which generated 14% of consolidated revenues in 2015, provides composite mat rentals, well site construction and related site services primarily to oil and gas customers. In addition, mat rental and services activity is expanding into applications in other markets, including electrical transmission/distribution, pipelines and petrochemical plants. We also manufacture and sell composite mats to E&P customers outside of the U.S., and to domestic customers outside of the oil and gas industry. Revenues from markets outside of oil and gas exploration represented approximately 34% of our mat rental and services revenues and approximately 77% of revenues from mat sales in 2015.During most of 2013 and 2014, revenues from mat sales were constrained by our manufacturing capacity limitations, along with our efforts to meet growing demand for mat rentals. During 2014, we allocated the majority of our composite mat production toward the expansion of our rental fleet, leaving fewer mats available for sale to customers. In order to address the manufacturing capacity limitations, we initiated a project in late 2013 to expand our mat manufacturing facility, located in Carencro, Louisiana. The project was completed in the second quarter of 2015 and nearly doubled our production capacity, which supports our expansion into new markets, both domestically and internationally. The expanded facility also includes a research and development center that was substantially completed by the end of 2015, intended to drive continued new product development efforts. Capital expenditures related to this project totaled $12.8 million, $28.8 million and $4.9 million in 2015, 2014, and 2013, respectively.In December 2013, we completed the acquisition of Terrafirma Roadways (“Terrafirma”), a provider of temporary roadways and worksites based in the United Kingdom, for total cash consideration of $6.8 million, net of cash acquired. Prior to the acquisition, Terrafirma had been operating as a partner to the Company since 2008, developing a rental business with DURA-BASE composite mats, primarily focused in the utility industry in the U.K.The drillingDrilling activity, in turn, depends on oil and gas commodity pricing, inventory levels, andproduct demand and regulatory actions, such as those affecting operations in the Gulf of Mexico in recent years.StartingBeginning in the fourth quarter of 2014 and continuing throughout 2015 and into the first quarter ofearly 2016, the price of oil declined dramatically from the price levels in recent years. As a result, E&P drilling activity has significantly declined in North America and many global markets over this period. While oil prices have improved from the lows reached in the first quarter of 2016, price levels remain lower than in recent years. Rig count data is the most widely accepted indicator of drilling activity. Average North American rig count data for the last three years ended December 31 is as follows: 978 1,862 1,761 (884 ) (47% ) 101 6% 192 379 353 (187 ) (49% ) 26 7% 1,170 2,241 2,114 (1,071 ) (48% ) 127 6% Year Ended December 31, 2016 vs 2015 2015 vs 2014 2016 2015 2014 Count % Count % U.S. Rig Count 509 978 1,862 (469 ) (48 %) (884 ) (47 %) Canadian Rig Count 130 192 379 (62 ) (32 %) (187 ) (49 %) Total 639 1,170 2,241 (531 ) (45 %) (1,071 ) (48 %) weaknessNorth America rig count continually declined in North American rig activity has continued into2015 and early 2016, reaching a low point of 447 in May 2016, and has since recovered to 1,082 rigs as of February 19, 2016,17, 2017, including 751 rigs in the North AmericanU.S. and 331 rigs in Canada. The Canadian rig count was at 720. The lowerreflects the normal seasonality for this market with the highest rig count levels generally observed in the first quarter of the year prior to spring break up. With the improvement in rig counts from the lows reached in May 2016, average activity levels are expected to improve in 2017 compared to 2016 but remain below prior year levels for the foreseeable future.and negatively impacted customer pricing and resulted in our North American operations in 2015. The lower customer demand and elevated costs associated with workforce reductions, all of which negatively impacted our profitability in 2015.profitability. Further, due to the fact that our business contains highsubstantial levels of fixed costs, including significant facility and personnel expenses, North American operating margins in both operating segments have been negatively impacted by the lower customer demand.Australia, and India,Australia has declined dramatically, our international activities have continued to grow in recent years driven primarily by the new contract awards described above, which include geographical expansion into new markets as well as market share gains in existing markets.initiatedimplemented cost reduction programs in the first quarter of 2015 including workforce reductions, reduced discretionary spending, and temporary salary freezes for substantially all employees, including executive officers in the first quarter of 2015 and have continued these efforts throughout 2015.officers. In September 2015, we also initiatedimplemented a voluntary early retirement program with certain eligible employees in the United States for retirement dates ranging from the fourth quarter of 2015 through the third quarter of 2016. As part of these cost reduction programs, we have reduced our North American employee base by 436 (approximately 34%) in 2015 in addition to eliminating substantially all contract positions. As a result of these workforce reductions, our 2015 operating results include $8.2 million of charges associated with employee termination costs with $5.7 million reported in cost of revenues and $2.5 million reported in selling, general and administrative expenses. The employee termination costs include $7.2 million in Fluids Systems, $0.7 million in Mats and Integrated Services and $0.3 million in our corporate office. Accrued employee termination costs at December 31, 2015 are $3.3 million and are expected to be substantially paid in the first half of 2016. Additional employee termination costs of $0.7 million associated with the voluntary retirement program will be recognized in 2016.During the fourth quarter of 2015, we also recorded a total of $80.5 million of charges for the reduction in value of certain assets and the pending resolution of certain wage and hour litigation claims. The Fluids Systems segment operating results include $75.5 million of these charges including a $70.7 million non-cash impairment of goodwill, following our November 1, 2015 annual evaluation, a $2.6 million non-cash impairment of assets, following our decision to exit a facility, and a $2.2 million charge to reduce the carrying value of diesel-based drilling fluid inventory, resulting from lower of cost or market adjustments due to the decline in selling prices for our diesel-based drilling fluid products coupled with declines in replacement costs of diesel fuel. In addition, corporate office expenses include a $5.0 million charge for the pending resolution of certain wage and hour litigation claims and related costs as described in“Note 14 – Commitments and Contingencies” in our Notes to Consolidated Financial Statements included in Item 8. Financial Statements and Supplementary Data. In our 2015 consolidated statement of operations, a total of $78.3 million of these charges are reported in impairments and other charges with the $2.2 million charge for the write-down of inventory being reported in cost of revenues.continuingfurther declines in activity in the first quarterhalf of 2016, we have initiatedimplemented further cost reduction actions including additional workforce reductions and beginning in March 2016, a temporary salary reduction for a significant number of North American employees, including executive officers, suspension of the Company’s matching contribution to the U.S. defined contribution plan as well as a reduction in cash compensation paid to our Board of Directors in order to further align our cost structure to the current activity levels. These temporary reductions are expected to remain in place until the second quarter of 2017.workforce reductions,termination programs, we expectrecognized charges for employee termination costs as shown in the table below: Year Ended December 31, (In thousands) 2016 2015 Fluids systems $ 4,125 $ 7,218 Mats and integrated services 285 717 Corporate office 162 228 Total employee termination costs $ 4,572 $ 8,163 recognizethe resolution of certain wage and hour litigation claims. Year Ended December 31, 2016 vs 2015 (In thousands) 2016 2015 $ % Revenues $ 471,496 $ 676,865 $ (205,369 ) (30 %) Cost of revenues 437,836 599,013 (161,177 ) (27 %) Selling, general and administrative expenses 88,473 101,032 (12,559 ) (12 %) Other operating income, net (4,345 ) (2,426 ) (1,919 ) NM Impairments and other charges 6,745 78,345 (71,600 ) NM Operating loss (57,213 ) (99,099 ) 41,886 42 % Foreign currency exchange (gain) loss (710 ) 4,016 (4,726 ) NM Interest expense, net 9,866 9,111 755 8 % Gain on extinguishment of debt (1,615 ) — (1,615 ) NM Loss from operations before income taxes (64,754 ) (112,226 ) 47,472 NM Benefit for income taxes (24,042 ) (21,398 ) (2,644 ) (12 %) Net loss $ (40,712 ) $ (90,828 ) $ 50,116 NM severanceinformation related to these charges.at least $1our revolving Credit Agreement partially offset by the benefit from the repurchase of $11.2 million of our Convertible Notes due 2017 in the first quarter of 2016. In December 2016, we issued $100 million of 4% Convertible Notes due 2021 and repurchased an additional $78.1 million of our Convertible Notes due 2017. As discussed further in Note 6 - Financing Arrangements in our Consolidated Financial Statements, interest expense associated with the absenceConvertible Notes due 2021 will include the non-cash amortization of debt discount and deferred debt issuance costs which will increase our reported interest expense in 2017.longer-termtax benefit is not permitted. Year ended December 31, 2016 vs 2015 (In thousands) 2016 2015 $ % Revenues Fluids systems $ 395,461 $ 581,136 $ (185,675 ) (32 %) Mats and integrated services 76,035 95,729 (19,694 ) (21 %) Total revenues $ 471,496 $ 676,865 $ (205,369 ) (30 %) Operating income (loss) Fluids systems $ (43,631 ) $ (86,770 ) $ 43,139 Mats and integrated services 14,741 24,949 (10,208 ) Corporate office (28,323 ) (37,278 ) 8,955 Operating loss $ (57,213 ) $ (99,099 ) $ 41,886 Segment operating margin Fluids systems (11.0 %) (14.9 %) Mats and integrated services 19.4 % 26.1 % Year ended December 31, 2016 vs 2015 (In thousands) 2016 2015 $ % United States $ 149,876 $ 299,266 $ (149,390 ) (50 %) Canada 33,050 52,673 (19,623 ) (37 %) Total North America 182,926 351,939 (169,013 ) (48 %) Latin America 40,736 46,668 (5,932 ) (13 %) Total Western Hemisphere 223,662 398,607 (174,945 ) (44 %) EMEA 167,130 164,426 2,704 2 % Asia Pacific 4,669 18,103 (13,434 ) (74 %) Total Eastern Hemisphere 171,799 182,529 (10,730 ) (6 %) Total Fluids Systems $ 395,461 $ 581,136 $ (185,675 ) (32 %) we may incur additional chargesin the deepwater Black Sea and other reductions in customer drilling activity related to the current commodity price environment, as well as an $8.5 million reduction from the impact of currency exchange. The decrease in revenues in Latin America is primarily attributable to declines in Petrobras drilling activity in Brazil and the impact of currency exchange partially offset by the $12.3 million revenue contribution from the offshore Uruguay project in the first half of 2016. The decline in Asia Pacific is primarily attributable to reduced drilling activity in Australia.relatedcompared to an operating loss of $86.8 million in 2015. The operating losses in 2016 and 2015 included $15.5 million and $75.5 million of charges, respectively, for the impairment of assets as discussed above. The remaining $16.8 million net increase in operating loss in 2016 compared to 2015 includes a $13.3 million increase in North American operating loss and a $3.5 million decrease in international operating income. The increase in North American operating loss is largely attributable to the $169.0 million decline in revenues described above, partially offset by the benefits of cost reduction programs and a $3.1 million reduction in employee termination costs. The $3.5 million decrease in international operating income is primarily attributable to an unfavorable change in customer mix in EMEA along with the revenue declines in Asia Pacific and Latin America and a $1.8 million negative impact of currency exchange. Year ended December 31, 2016 vs 2015 (In thousands) 2016 2015 $ % Mat rental and services $ 58,389 $ 73,037 $ (14,648 ) (20 %) Mat sales 17,646 22,692 (5,046 ) (22 %) Total $ 76,035 $ 95,729 $ (19,694 ) (21 %) efforts, or potential asset impairments. $ $ 676,865 $ 1,118,416 $ (441,551 ) (39% ) 599,013 876,999 (277,986 ) (32% ) 101,032 112,648 (11,616 ) (10% ) (2,426 ) (1,827 ) (599 ) 33 % 78,345 - 78,345 - (99,099 ) 130,596 (229,695 ) (176% ) 4,016 108 3,908 3619 % 9,111 10,431 (1,320 ) (13% ) (112,226 ) 120,057 (232,283 ) (193% ) (21,398 ) 41,048 (62,446 ) (152% ) (90,828 ) 79,009 (169,837 ) (215% ) - 1,152 (1,152 ) - - 22,117 (22,117 ) - $ (90,828 ) $ 102,278 $ (193,106 ) (189% ) Year Ended December 31, 2015 vs 2014 (In thousands) 2015 2014 $ % Revenues $ 676,865 $ 1,118,416 $ (441,551 ) (39 %) Cost of revenues 599,013 876,999 (277,986 ) (32 %) Selling, general and administrative expenses 101,032 112,648 (11,616 ) (10 %) Other operating income, net (2,426 ) (1,827 ) (599 ) (33 %) Impairments and other charges 78,345 — 78,345 NM Operating income (loss) (99,099 ) 130,596 (229,695 ) (176 %) Foreign currency exchange loss 4,016 108 3,908 NM Interest expense, net 9,111 10,431 (1,320 ) (13 %) Income (loss) from continuing operations before income taxes (112,226 ) 120,057 (232,283 ) (193 %) Provision (benefit) for income taxes (21,398 ) 41,048 (62,446 ) (152 %) Income (loss) from continuing operations (90,828 ) 79,009 (169,837 ) (215 %) Income from discontinued operations, net of tax — 1,152 (1,152 ) (100 %) Gain from disposal of discontinued operations, net of tax — 22,117 (22,117 ) (100 %) Net income (loss) $ (90,828 ) $ 102,278 $ (193,106 ) (189 %) 2015 as described above.2015. Additional information regarding the change in cost of revenues is provided within the operating segment results below. pending resolution of certain wage and hour litigation claims. These charges include a $70.7 million non-cash impairment of goodwill related to the Fluids Systems segment and a $2.6 million non-cash impairment of assets, following our decision to exit a drilling fluids facility. In addition, we recognized a $5.0 million charge in December 2015 forreflecting the pendingestimated resolution of certain wage and hour litigation claims and related costs.Seecosts. See “Note 5 – Goodwill and Other Intangible Assets”, “Note 4 – Property, Plant and Equipment” and “Note 1415 – Commitments and Contingencies” in our Notes to Consolidated Financial Statements included in Item 8. Financial Statements and Supplementary Data for additional information related to these charges.forgiven, which we expect will reduce the foreign currency exchange volatility going forward.our $172.5 million in unsecured convertible notes (“Senior Notes”),the Convertible Notes due 2017, totaled $9.1 million for 2015 compared to $10.4 million in 2014. The decrease in 2015 was primarily attributable to lower average borrowings in our international subsidiaries.2-14 - Discontinued Operations” in our Notes to Consolidated Financial Statements included in Item 8. Financial Statements and Supplementary Data for additional information. $ $ 581,136 $ 965,049 $ (383,913 ) (40%) 95,729 153,367 (57,638 ) (38%) $ 676,865 $ 1,118,416 $ (441,551 ) (39%) $ (86,770 ) $ 95,600 $ (182,370 ) 24,949 70,526 (45,577 ) (37,278 ) (35,530 ) (1,748 ) $ (99,099 ) $ 130,596 $ (229,695 ) (14.9% ) 9.9 % 26.1 % 46.0 % Year ended December 31, 2015 vs 2014 (In thousands) 2015 2014 $ % Revenues Fluids systems $ 581,136 $ 965,049 $ (383,913 ) (40 %) Mats and integrated services 95,729 153,367 (57,638 ) (38 %) Total revenues $ 676,865 $ 1,118,416 $ (441,551 ) (39 %) Operating income (loss) Fluids systems $ (86,770 ) $ 95,600 $ (182,370 ) Mats and integrated services 24,949 70,526 (45,577 ) Corporate office (37,278 ) (35,530 ) (1,748 ) Operating income (loss) $ (99,099 ) $ 130,596 $ (229,695 ) Segment operating margin Fluids systems (14.9 %) 9.9 % Mats and integrated services 26.1 % 46.0 % $ $ 299,266 $ 607,411 $ (308,145 ) (51%) 52,673 79,516 (26,843 ) (34%) 351,939 686,927 (334,988 ) (49%) 164,426 166,000 (1,574 ) (1%) 46,668 84,555 (37,887 ) (45%) 18,103 27,567 (9,464 ) (34%) $ 581,136 $ 965,049 $ (383,913 ) (40%) Year ended December 31, 2015 vs 2014 (In thousands) 2015 2014 $ % United States $ 299,266 $ 607,411 $ (308,145 ) (51 %) Canada 52,673 79,516 (26,843 ) (34 %) Total North America 351,939 686,927 (334,988 ) (49 %) Latin America 46,668 84,555 (37,887 ) (45 %) Total Western Hemisphere 398,607 771,482 (372,875 ) (48 %) EMEA 164,426 166,000 (1,574 ) (1 %) Asia Pacific 18,103 27,567 (9,464 ) (34 %) Total Eastern Hemisphere 182,529 193,567 (11,038 ) (6 %) Total Fluids Systems $ 581,136 $ 965,049 $ (383,913 ) (40 %) the contracts mentioned above, includingactivity in Kuwait, the deepwater Black Sea, Algeria and the Republic of Congo. The decrease in revenues in Latin America is primarily attributable to lower customer drilling activity and $19 million from the negative impact of currency exchange. The decline in Asia Pacific is primarily related to lower revenues for land drilling customers, along with a $4 million negative impact from currency exchange.above.Theabove. The remaining change in operating results includes a $110.7 million decrease from North American operations largely attributable to the decline in revenues described above, along with $7.2 million of charges associated with employee termination costs, partially offset by the benefits of cost reduction programs. Operating income from international operations increased $3.8 million primarily reflecting the benefit of improved profitability in the EMEA and Latin America regions, partially offset by the negative impact of currency exchange as well as a small operating loss in Asia Pacific.As a result of the decline in commodity prices as described above, we expect drilling activity to remain below 2015 levels in 2016, reducing the demand for our services and negatively impacting customer pricing primarily in our North American operations. Further, while we have executed actions to reduce our workforce and cost structure, our business contains high levels of fixed costs, including significant facility and personnel expenses. Therefore, we expect operating income in our North American operations to be negatively impacted by the lower revenues in 2016, as compared to 2015. In the absence of a longer-term increase in drilling activity, we may incur additional charges related to further cost reduction efforts, or potential asset impairments, which may negatively impact our future operating results.Also, in recent years, the business environment in Brazil has become increasingly challenging, particularly as Petrobras, our primary customer in the region, has focused more efforts on well completions and workover activities, and less on drilling activities. In addition, the lack of timely payment of Petrobras-related invoicing has caused periodic increases in invested working capital associated with participation in this market. More recently, a significant number of senior executives at Petrobras resigned their positions in connection with a widely-publicized corruption investigation and Petrobras has announced further reductions in drilling activities. We expect these developments to continue to disrupt Petrobras’ operations in the near term. In response to these changes in the business environment, we have taken actions to reduce the cost structure of this operation and are continuing to evaluate further actions. While the Brazilian deepwater drilling market remains an important component of our long-term strategy, the profitability of our business in Brazil remains highly dependent on increasing levels of drilling activity by Petrobras and other E&P customers. In the absence of a longer-term increase in drilling activity, we may incur additional charges related to further cost reduction efforts, or potential asset impairments, which may negatively impact our future operating results. $ $ 73,037 $ 125,861 $ (52,824 ) (42%) 22,692 27,506 (4,814 ) (18%) $ 95,729 $ 153,367 $ (57,638 ) (38%) Year ended December 31, 2015 vs 2014 (In thousands) 2015 2014 $ % Mat rental and services $ 73,037 $ 125,861 $ (52,824 ) (42 %) Mat sales 22,692 27,506 (4,814 ) (18 %) Total $ 95,729 $ 153,367 $ (57,638 ) (38 %) Revenues from mat sales have typically fluctuated based on the timing of mat orders from customers along with management’s allocation of plant capacity. As described above, due to the weakness in E&P customer activity during 2015, we increased efforts to expand into applications in other markets, including electrical transmission/distribution, pipelines and petrochemical plants. Revenues in 2015 from markets outside of oil and gas exploration represented approximately 34% of mat rental and services revenues and approximately 77% of revenues from mat sales compared to approximately 23% and 31%, respectively in 2014.As noted above, we completed the expansion of our mat manufacturing facility in 2015, significantly increasing our production capacity. While the expansion project has relieved production capacity limitations that limited our revenues from mat sales in 2014, the recent decline in commodity prices has resulted, and is expected to continue to result, in lower drilling activity for our E&P customers. This lower drilling activity has reduced the demand for our services and negatively impacted customer pricing in our North American operations in 2015 as compared to 2014. As a result of the lower customer demand and more competitive pricing environment, we expect operating income from our North American exploration markets to be lower in 2016, as compared to 2015 levels, with our ability to mitigate this impact dependent upon the further expansion into applications in other markets. Further, due to the fact that our business contains high levels of fixed costs, including significant facility and personnel expenses, we expect North American operating margins to remain below those achieved in recent years in the absence of a longer-term increase in revenues.related toreflecting the pendingestimated resolution of certain wage and hour litigation claims as described above and$2.4and $2.4 million of increased costs related to legal matters, including the wage and hour litigation claims, being settled, partially offset by $2.0 million in reduced spending related to strategic planning projects and $1.3 million in lower performance-based incentive compensation along with workforce reductions and other cost control efforts.Year Ended December 31, 2014 Compared to Year Ended December 31, 2013Consolidated Results of OperationsSummarized results of operations for the year ended December 31, 2014 compared to the year ended December 31, 2013 are as follows: $ $ 1,118,416 $ 1,042,356 $ 76,060 7% 876,999 858,467 18,532 2% 112,648 93,657 18,991 20% (1,827 ) (4,213 ) 2,386 (57%) 130,596 94,445 36,151 38% 108 1,819 (1,711 ) (94%) 10,431 11,279 (848 ) (8%) 120,057 81,347 38,710 48% 41,048 28,725 12,323 43% 79,009 52,622 26,387 50% 1,152 12,701 (11,549 ) (91%) 22,117 - 22,117 - $ 102,278 $ 65,323 $ 36,955 57% RevenuesRevenues increased 7% to $1,118.4 million in 2014, compared to $1,042.4 million in 2013. This $76.1 million increase includes a $63.5 million (8%) increase in revenues in North America, including a $33.1 million increase in our Fluids Systems segment and a $30.4 million increase in our Mats and Integrated Services segment. Revenues from our international operations increased by $12.5 million (5%), primarily attributable to increases in the Fluids Systems EMEA region, partially offset by declines in the Asia Pacific and Latin America regions. International revenues in 2014 also include a $6.8 million increase resulting from the December 2013 acquisition of Terrafirma. Additional information regarding the change in revenues is provided within the operating segment results below.Cost of RevenuesCost of revenues increased 2% to $877.0 million in 2014, compared to $858.5 million in 2013. Despite a 7% increase in revenues, cost of revenues only increased 2% in 2014, benefitting from an improved sales mix, including continued growth in our higher margin family of Evolution drilling fluid systems and higher growth in the Mats and Integrated Services segment, which provides a stronger margin relative to the Fluids Systems segment. Additional information regarding the change in cost of revenues is provided within the operating segment results below.Selling, General and Administrative ExpensesSelling, general and administrative expenses increased $19.0 million to $112.6 million in 2014 from $93.7 million in 2013. The increase is primarily attributable to increases in personnel and administrative costs associated with company growth, a $5.1 million increase in performance-based incentive compensation, a $3.1 million increase in stock-based compensation, and a $3.8 million increase in spending related to strategic planning projects, including the development of our deepwater market penetration strategy and other growth initiatives, offset partially by a $1.1 million decrease in spending related to acquisition and divesture activity.Other Operating Income, netOther operating income was $1.8 million in 2014 compared to $4.2 million in 2013. The 2014 fiscal year includes $1.2 million of gains recognized on the sale of two properties, while 2013 included the sale of the completion services and equipment rental business assets, which generated a gain of $2.7 million.Foreign Currency ExchangeForeign currency exchange was a $0.1 million loss in 2014, compared to a $1.8 million loss in 2013, and primarily reflects the impact of the fluctuating U.S. dollar on currency translations on assets and liabilities (including intercompany balances) held in our international operations that are denominated in currencies other than our functional currencies.Interest expense, netInterest expense totaled $10.4 million for 2014 compared to $11.3 million in 2013. The decrease in 2014 was primarily attributable to $0.8 million of interest capitalization associated with the mat manufacturing facility expansion project. The remaining decrease was attributable to lower average borrowings under our U.S. revolving credit facility, partially offset by higher average borrowings in our international subsidiaries.Provision for income taxesThe provision for income taxes for 2014 was $41.0 million, reflecting an effective tax rate of 34.2%, compared to $28.7 million in 2013, reflecting an effective tax rate of 35.3%. The decrease in the effective tax rate is primarily related to increased tax credits and other benefits identified with the completion of U.S. and foreign tax filings, along with a reduced impact of nondeductible expenses partially offset by an increase in the provision for uncertain tax positions.Discontinued operationsIncome from our discontinued Environmental Services operations that was sold in March 2014 was $1.2 million in 2014 compared to $12.7 million in 2013. In addition, 2014 includes a $22.1 million gain from the March 2014 sale of the business as described above. See “Note 2 - Discontinued Operations” in our Notes to Consolidated Financial Statements included in Item 8. Financial Statements and Supplementary Data for additional information.Operating Segment ResultsSummarized financial information for our reportable segments is shown in the following table (net of inter-segment transfers): $ $ 965,049 $ 926,392 $ 38,657 4% 153,367 115,964 37,403 32% $ 1,118,416 $ 1,042,356 $ 76,060 7% �� $ 95,600 $ 72,604 $ 22,996 70,526 49,394 21,132 (35,530 ) (27,553 ) (7,977 ) $ 130,596 $ 94,445 $ 36,151 9.9 % 7.8 % 46.0 % 42.6 % Fluids SystemsRevenuesTotal revenues for this segment consisted of the following: $ $ 607,411 $ 606,261 $ 1,150 - 79,516 47,559 31,957 67% 686,927 653,820 33,107 5% 166,000 137,044 28,956 21% 84,555 99,116 (14,561 ) (15%) 27,567 36,412 (8,845 ) (24%) $ 965,049 $ 926,392 $ 38,657 4% North American revenues increased 5% to $686.9 million in 2014, compared to $653.8 million in 2013. While the North American rig count improved by 6% over this period, the benefits of market share gains in Canada, strong demand for wholesale barite and increases in U.S. drilling activity were partially offset by market share losses in South Texas and reduced drilling activity of a key customer in the U.S. In addition, our U.S. completion services and equipment rental business, which was sold in December of 2013, contributed $16.7 million of revenue to 2013.Internationally, revenues increased 2% to $278.1 million in 2014, as compared to $272.6 million in 2013 as increases in the EMEA region were partially offset by decreases in the Latin America and Asia Pacific regions. In 2014, international revenues were negatively impacted by approximately $11 million from the impact of currency exchange, primarily in Latin America and Asia Pacific. The increase in the EMEA region is primarily attributable to approximately $23 million in revenues from the new contracts described above, including in the Black Sea, India and Kuwait. The decline in the Asia Pacific region is primarily attributable to lower customer drilling activities under an offshore contract in Australia and lower land drilling revenues. The decrease in the Latin America region is primarily attributable to declines in Petrobras drilling activity and the impact of currency exchange.Operating IncomeOperating income increased $23.0 million in 2014, as compared to 2013, and included a $15.0 million increase from North American operations. While North American revenues increased 5% as described above, operating income in North America increased $15.0 million primarily attributable to improved sales mix, including approximately $109 million increase in revenues from our proprietary Evolution drilling fluid systems, which generate higher margins relative to our traditional product offering. North American operating income in 2014 also benefitted from the increased revenues in Canada and from the strong demand for wholesale barite.Our international operating income increased by $8.0 million, primarily reflecting the benefit from the increased revenues in the EMEA region described above.Mats and Integrated ServicesRevenuesTotal revenues for this segment consisted of the following: $ $ 125,861 $ 71,429 $ 54,432 76% 27,506 44,535 (17,029 ) (38%) $ 153,367 $ 115,964 $ 37,403 32% Mat rental and services revenues increased $54.4 million in 2014, compared to 2013, largely due to increased demand for our composite mat products in the Northeast U.S. region, a large site preparation project in the Gulf Coast region and our expansion into the utility and pipeline markets. In addition, 2014 benefitted from a $6.8 million increase from the U.K. rental operation, following the December 2013 acquisition of Terrafirma described above. Mat sales decreased by $17.0 million in 2014, as we allocated the majority of our 2014 composite mat production toward the expansion of our rental fleet, leaving fewer mats available for sale to customers.Operating IncomeSegment operating income in 2014 increased by $21.1 million, as compared to 2013, attributable to the $37.4 million increase in revenues described above. The strong segment operating margin in both 2014 and 2013 was driven by high utilization of mats in our rental fleet, and high utilization of our production facility, which was running at maximum production capacity levels during both periods.Corporate officeCorporate office expenses increased $8.0 million to $35.5 million in 2014, compared to $27.6 million in 2013. The increase is attributable to increases in personnel and administrative costs related to company growth, higher performance-based incentive compensation, higher stock-based compensation, and a $3.5 million increase in spending related to strategic planning projects, including the development of our deepwater market penetration strategy, international tax planning projects, and other growth initiatives, offset partially by a $1.1 million decrease in spending related to acquisition and divestiture activity. Corporate office expenses for 2014 also include $1.0 million in incremental costs associated with our corporate office relocation and employee separation costs.20152016 totaled $121.5$11.1 million compared to $89.2$121.5 million during 2014.2015. In 2016, net loss adjusted for non-cash items provided cash of $23.2 million, while changes in operating assets used $12.1 million, including $9.0 million from the increase to U.S. income tax receivables related to the carryback of U.S. federal tax losses incurred in 2016. The operating cash flow generated in 2015 iswas primarily attributable to the decrease in working capital resulting from the decline in revenues related to the slow-down in North American drilling activity. Net income adjusted for non-cash items provided $42.6 million of cash in 2015, while changes in operating assets provided $78.9 million of cash, including $122.4 million from the reduction in accounts receivable.20152016 was $84.4$28.3 million primarily consisting ofincluding capital expenditures of $69.4$38.4 million as well as $4.4 million to fund the acquisition of Pragmatic Drilling Fluids Additives, Ltd. These outflows were partially offset by a $10.1 million reduction in restricted cash and $17.5$4.5 million used to collateralize letters of credit.proceeds from the sale of assets. Capital expenditures in 20152016 included $40.5$32.3 million in the Fluids Systems segment, including $16.0 million related to our new fluids blending facility and distribution center in Conroe, Texas, $10.1a total of $27.8 million related to the facility upgrade and expansion of our Fourchon, Louisiana facility, serving the Gulf of Mexico deepwater market,our new fluids blending facility and $5.1 milliondistribution center in Conroe, Texas, and equipment to support new customer contractsthe contract with Total S.A. in EMEA. TheUruguay. Capital expenditures in the Mats & Integrated Services segment capital expenditures totaled $27.5$4.6 million in 2015, including $12.8 million related2016, mainly associated with additions to the completion of the manufacturing plant expansion and new research and development center at our Carencro, Louisiana facility and $12.6 million related to the deployment of produced mats into themat rental fleet.20152016 was $6.7$0.7 million. Cash used in financing activities includes $87.3 million primarily reflecting shares repurchased in lieuused for the repurchase of taxes under vesting$89.3 million aggregate principal amount of restricted stock awardsour Convertible Notes due 2017 and costs associated with amendments related to our U.S. revolvingnet repayments on foreign lines of credit facility.the first half of 2016, we anticipate that our working capital requirements will decrease as a result of on-going efforts to reduce inventory levels, following the declines in customer activity experienced in 2015 and continuing into 2016. In the first half of 2016, we expect to fund approximately $8 million for accrued severance obligations as well as the pending resolution of the wage and hour litigation. In addition, we expect to receive a cash refund for income taxes of approximately $29 million in the first half of 2016 upon filing amended returns to carryback the U.S. federal tax losses incurred in 2015. We expect total 20162017 capital expenditures to range between $30$15 million to $45$20 million, including remaining expenditures for the completion of the facility upgrade and expansion of our Fourchon, Louisiana facility serving the Gulf of Mexico deepwater market, as well as required infrastructure investments to support our international growth in the Fluids Systems segment. market.2015,2016, we had cash on-hand of $107.1$87.9 million, of which $57.2$44.0 million resides within our foreigninternational subsidiaries that we intend to leave permanently reinvested abroad. In February 2016,the first half of 2017, we used $9.2expect to receive a cash refund for income taxes of approximately $38.0 million upon filing amended returns to carryback the U.S. federal tax losses incurred in 2016. In addition, availability under our ABL Facility, subject to covenant compliance and certain restrictions as discussed further below, also provides additional liquidity. Availability under the ABL Facility was $76.3 million as of cashJanuary 1, 2017 and will fluctuate directionally based on the level of eligible accounts receivable, inventory, and, subject to purchase $11.2 millionsatisfaction of our convertible senior notescertain financial covenants as described below, composite mats included in the open market under our existing Board authorized repurchase program. We may continue to make repurchases under this authorization from time to time during 2016. rental fleet.as well as cash generated by operations, including U.S. income tax refunds, and anticipated decreases in working capital levelsestimated availability under our ABL Facility to be adequate to fund current operations and our anticipated capital needs during the next 12 months. Availability undermonths and the June 2017 provision related to the maturity of our existing credit agreement, subject to continued covenant complianceConvertible Notes due 2017 as discussed further below, could also provide additional liquidity.follows as of December 31: $ 172,497 $ 172,498 (1,296 ) (2,036 ) - - 7,392 11,648 178,593 182,110 520,259 625,458 $ 698,852 $ 807,568 25.6 % 22.6 % (In thousands) December 31, 2016 December 31, 2015 Convertible Notes due 2017 $ 83,256 $ 172,497 Convertible Notes due 2021 100,000 — Revolving credit facility — — ABL Facility — — Other debt 380 7,392 Unamortized discount and debt issuance costs (27,368 ) (1,296 ) Total debt 156,268 178,593 Stockholder's equity 500,543 520,259 Total capitalization $ 656,811 $ 698,852 Total debt to capitalization 23.8 % 25.6 % Our financing arrangements includeConvertible Notes due 2017. In September 2010, we issued $172.5 million of unsecured convertible senior notes (“Senior Notes”) and a $150.0that mature on October 1, 2017, of which, $83.3 million revolving credit facility which, subject to the conditions contained therein can be increased to a maximum capacity of $275.0 million. Ataggregate principal amount was outstanding at December 31, 2015, we had no outstanding borrowings under the revolving credit facility. Additionally, our foreign operations had $7.4 million outstanding under lines of credit and other borrowings.2016. The Senior Notesnotes bear interest at a rate of 4.0% per year, payable semi-annuallysemiannually in arrears on April 1 and October 1 of each year. Holders may convert the Senior Notesnotes at their option at any time prior to the close of business on the business day immediately preceding the October 1, 2017 maturity date. The conversion rate is initially 90.8893 shares of our common stock per $1,000 principal amount of Senior Notesnotes (equivalent to an initial conversion price of $11.00 per share of common stock), subject to adjustment in certain circumstances. Upon conversion, the Senior Notesnotes will be settled in shares of our common stock. In 2015, holders converted an insignificant amount of Senior Notes into shares of our common stock. We may not redeem the Senior Notesnotes prior to their maturity date. In February 2016, we repurchased $11.2$89.3 million aggregate principal amount of our convertible senior notes in the open marketConvertible Notes due 2017 for $9.2$87.3 million under our existing Board authorized repurchase programand will recognizerecognized a net gain in 2016 forof $1.6 million reflecting the difference in the amount paid and the net carrying value of the extinguished debt.debt, including debt issuance costs. We intend to use available cash on-hand, cash generated by operations, including U.S. income tax refunds, and estimated availability under our ABL Facility to repay the remaining Convertible Notes due 2017."Credit Agreement"“Credit Agreement”) which providesprovided for a $200$200.0 million revolving loan facility available for borrowings and letters of credit and expires inthrough March 2020. In December 2015, the Credit Agreement was amended, decreasing the revolving credit facility to $150.0 million and subsequently, we terminated the Credit Agreement in May 2016, replacing it with an asset-based revolving loan facility as discussed further below. As of the date of termination, we had no outstanding borrowings under the Credit Agreement. In the second quarter of 2016, we recognized a non-cash charge of $1.1 million in interest expense for the write-off of debt issuance costs in connection with the termination.First Amendment to Third Amended and Restated Credit Agreement (“Amendment”) decreasingmaximum capacity of $150.0 million. The ABL Facility terminates on March 6, 2020; however, the revolving loan facility to $150 million, modifying certain financial covenants through the first quarter of 2017, and modifying the borrowing cost and fee provisions. The Credit AgreementABL Facility has a springing maturity date that will accelerate the maturity of the credit facility to June 30, 2017 if, prior to such date, the SeniorConvertible Notes due 2017 have not either been repurchased, redeemed, converted and/or refinanced in full or the Company haswe have not provided sufficient funds to an escrow agent to repay the SeniorConvertible Notes due 2017 in full on their maturity date. For this purpose, funds may be provided in cash to an escrow agent or a combination of cash to an escrow agent and the assignment of a portion of availability under the ABL Facility. The ABL Facility requires compliance with a minimum fixed charge coverage ratio and minimum unused availability of $25.0 million to utilize borrowings or assignment of availability under the ABL Facility towards funding the repayment of the 2017 Convertible Notes.Amendment,ABL Facility, we canmay elect to borrow at a variable interest rate eitherplus an applicable margin based on either, (1) LIBOR subject to a floor of zero or (2) a base rate equal to the highest of: (a) the federal funds rate plus 50 basis points, (b) the prime rate of Bank of America, N.A. or (c) LIBOR, subject to a floor of zero, plus 100 basis points. The applicable margin ranges from 225 to 350 basis points for LIBOR borrowings, and 125 to 250 basis points with respect to base rate borrowings, based on our consolidated leverageEBITDA, ratio ranging from 175of debt to 325consolidated EBITDA, and consolidated fixed charge coverage ratio, each as defined in the ABL Facility. As of December 31, 2016, the applicable margin for borrowings under our ABL Facility is 350 basis points or at a variable interest rate based on the greatest of: (a) prime rate, (b) the federal funds rate in effect plus 50 basis points, or (c) the Eurodollar rate for a Eurodollar Loan with a one-month interest period plus 100 basis points, in each case plus a margin ranging from 75respect to 225 basis points based on our consolidated leverage ratio. The applicable margins on LIBOR borrowings and Eurodollar borrowings on December 31, 2015 were 250 and 150 basis points respectively.with respect to base rate borrowings. In addition, we are required to pay a commitment fee on the unused portion of the Credit Agreement, as amended,ABL Facility ranging from 37.5 to 50.062.5 basis points, based on ourthe ratio of debt to consolidated leverage ratio.EBITDA, as defined in the ABL Facility. The applicable commitment fee onas of December 31, 20152016 was 37.562.5 basis points.Credit Agreement contains customary financial and operating covenants, including a consolidated leverage ratio, a senior secured leverage ratio and an interest coverage ratio. The Credit Agreement also limits the payment of dividends on our common stock, the repurchase of our common stock and the conversion, redemption, defeasance or refinancing of the Senior Notes.Pursuant to the Amendment, a temporary increase has been made to the consolidated leverage ratio covenant, increasing the ratio from 4.0:1.0 to 5.5:1.0 through 2016, then reducing to 4.5 in the first quarter of 2017, and returning to 4.0 thereafter. During the same period, the senior secured leverage ratio covenant is being reduced from 3.0:1.0 to 2.0:1.0 through 2016, then increasing to 2.5 in the first quarter of 2017, and returning to 3.0 thereafter. The calculation for these two ratios has also been modified to allow for up to $10 million of adjustments for severance costs, as well as foreign exchange impacts related to our Brazilian intercompany financial restructuring. At December 31, 2015, we have not utilized any of this $10 million adjustment allowance in determining the available borrowing capacity under the Credit Agreement or in the calculation of the financial ratios disclosed below.At December 31, 2015, considering our current financial covenant ratios disclosed below, we had $16.7 million of borrowing capacity available under our Credit Agreement, without taking into account any available adjustments described above, which, if utilized, could increase the availability under our Credit Agreement. The Credit AgreementABL Facility is a senior secured obligation, secured by first liens on all of our U.S. tangible and intangible assets. Additionally, the Credit Agreement is guaranteed by certain of our U.S. subsidiariesassets and a portion of the capital stock of our non-U.S. subsidiaries has also been pledged as collateral.financialABL Facility contains customary operating covenants under our Credit Agreement followingand certain restrictions including, among other things, the December 2015 Amendmentincurrence of additional debt, liens, dividends, asset sales, investments, mergers, acquisitions, affiliate transactions, stock repurchases and the applicable ratios as of the dates indicated, are as follows: 2.50 3.90 9.62 17.63 5.50 5.03 2.07 1.12 2.00 0.21 0.07 0.19 We were inother restricted payments. The ABL Facility also requires compliance with all financial covenants asa fixed charge coverage ratio if availability under the ABL Facility falls below $25.0 million. In addition, the ABL Facility contains customary events of December 31, 2015. However, continued compliance with our covenants, particularly the consolidated leverage ratio, is largely dependent on our ability to generate sufficient levels of EBITDA, as defined in the Credit Agreement, as amended, or reduce our debt levels. Based upon our current and expected financial condition, and our forecasted results of operations, we anticipate having difficulty remaining in compliance with the financial covenants as of the end of the first quarter and throughout 2016, particularly if market conditions deteriorate further. Asdefault, including, without limitation, a result, we have initiated discussions with our lead bank in an effort to explore our options, which may include a waiver or amendment to our Credit Agreement. Any waiver or amendment to the Credit Agreement may increase the cost of our borrowings and impose additional limitations over certain types of activities. However, there is no certainty that we will be able to obtain any such relief. Any failure to comply with such financial covenants would result in an eventmake payments under the facility, acceleration of default under our Credit Agreement if we are unable to obtain a waiver or amendment on a timely basis. While no amounts are currently outstanding under our Credit Agreement, an eventmore than $25.0 million of default would prevent us from borrowing under our Credit Agreementother indebtedness, certain bankruptcy events and could result in our having to immediately repay all amounts outstanding, if any, under our Credit Agreement. In the event any outstanding amountscertain change of indebtedness in excess of $25 million are accelerated, this could also cause a default under our Senior Notes.At December 31, 2015, we had letters of credit issued and outstanding which totaled $14.8 million that are collateralized by $15.5 million in restricted cash. Additionally, our foreign operations had $7.4 million outstanding under lines of credit and other borrowings, as well as $10.4 million outstanding in letters of credit and other guarantees, with certain letters of credit that are collateralized by $2.0 million in restricted cash. At December 31, 2015, this restricted cash totaling $17.5 million was included in other current assets in the accompanying balance sheet.primarily those in Italy Brazil and India maintain local credit arrangements consisting primarily of lines of credit with several banks, which are renewed on an annual basis. In December 2016, we terminated our revolving line of credit in Brazil and repaid the outstanding balance. We utilize local financing arrangements in our foreign operations in order to provide short-term local liquidity needs, as well as to reduce the net investment in foreign operations subject to foreign currency risk.needs. Advances under these short-term credit arrangements are typically based on a percentage of the subsidiary’s accounts receivable or firm contracts with certain customers. The weighted average interest rateTotal outstanding balances under these arrangements was 14.9% and 15.1% onother domestic financing arrangements were $0.4 million and $7.4 million at December 31, 2016 and 2015, respectively.outstanding balancesrestricted cash of $7.4 million and $11.4$17.5 million, at December 31, 2015 and 2014, respectively.$3.3$3.0 million and $3.5$3.3 million at December 31, 20152016 and 2014,2015, respectively. We also had $0.4 million and $0.4 million in guarantee obligations in connection with facility closure bonds and other performance bonds issued by insurance companies outstanding as of December 31, 20152016 and 2014.20152016 is as follows: 2017-2018 2019-2020 $ 11 $ - $ - $ - $ 11 - 172,507 - - �� 172,507 6,900 5,232 - - 12,132 7,371 - - - 7,371 8,648 11,118 7,612 12,688 40,066 116,321 - - - 116,321 4,913 2,000 - - 6,913 - - - 5,627 5,627 384 - - - 384 17,994 6,382 898 - 25,274 $ 162,542 $ 197,239 $ 8,510 $ 18,315 $ 386,606 (In thousands) 2017 2018 2019 2020 2021 Thereafter Total Convertible Notes due 2017 $ 83,256 $ — $ — $ — $ — $ — $ 83,256 Other current debt 380 — — — — — 380 Convertible Notes due 2021 — — — — 100,000 — 100,000 Interest on Convertible Notes due 2017 and Convertible Notes due 2021 7,286 4,000 4,000 4,000 4,000 — 23,286 Operating leases 9,310 6,128 4,724 3,805 3,342 9,780 37,089 95,128 — — — — — 95,128 Purchase commitments, not accrued 3,000 — — — — — 3,000 — — — — — 6,196 6,196 Performance bond obligations 384 — — — — — 384 Letter of credit commitments 6,407 8,068 1,290 — 82 1,383 17,230 Total contractual obligations $ 205,151 $ 18,196 $ 10,014 $ 7,805 $ 107,424 $ 17,359 $ 365,949 (1) SeniorConvertible Notes(2) Notes to Consolidated Financial Statements included in Item 8. Financial Statements and Supplementary Data in this report.operating cash flows and available cash on-hand. Subjecton-hand, cash generated by operations, including U.S. income tax refunds, and estimated availability under our ABL Facility, subject to continued covenant compliance funds under our existing Credit Agreement could also be available for the payment of such obligations and commitments.certain restrictions as discussed further above. The specific timing of settlement for certain long-term obligations cannot be reasonably estimated.Notes to Consolidated Financial Statements included in Item 8. Financial Statements and Supplementary Data for a discussion of the accounting policies governing each of these matters. Our estimates are based on historical experience and on our future expectations that are believed to be reasonable. The combination of these factors forms the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from our current estimates and those differences may be material.2014 and 2013,2014, provisions for uncollectible accounts receivable related to continuing operations were $2.4 million, $1.9 million and $1.2 million, and $0.3 million, respectively.the third quarter of 2015, primarily as a result of the ongoing weakness in commodity prices, further decreases in U.S. drilling activities, and increased expectations that the current weakness in U.S. drilling activities would persist for a longer period, along with a significant decline in the quoted market prices ofcompleting our common stock,November 1, 2016 evaluation, we considered these developments at that time to be an indicator of impairment that required us to complete an interim goodwill impairment evaluation. As such, during the third quarter of 2015, we estimated the fair values for each of our reporting units based on our current forecasts and expectations for market conditions at that time and determined that even though the estimated fair values for each reporting unit had decreased in 2015, each reporting unit’s fair value remainedwas in excess of itsthe net carrying value and therefore, no impairment was required. Based on this fair value estimate in the third quarter of 2015, the estimated fair value for our drilling fluids reporting unit was approximately 10% above the reporting unit’s carrying value. For our mats and integrated services reporting unit, our estimated fair value in the third quarter of 2015 was significantly in excess of that reporting unit’s carrying value. the fourth quarter of 2015, we completed the annual evaluation of the carrying values of our goodwill and other indefinite-lived intangible assets as of November 1, 2015. As a result of the further decline in commodity prices and drilling activities in the fourth quarter of 2015, including the more prolonged projection of lower commodity prices and drilling activities, as well as the further decline in the quoted market prices of our common stock, we determined that the carrying value of our drilling fluids reporting unit exceeded its estimated fair value such that goodwill was potentially impaired. As a result, we completed the step two of the evaluation to measure the amount of goodwill impairment determining a full impairment of goodwill related to the drilling fluids reporting unit was required. As such, in the fourth quarter of 2015, we recorded a $70.7 million non-cash impairment charge to write-off the goodwill related to the drilling fluids reporting unit, which is included in impairments and other charges.&and integrated services reporting unit did not have a fair value below its net carrying value and therefore, no impairment was required. For our mats and integrated services reporting unit, our fair value estimate remains significantly in excess of that reporting unit’s carrying value. fourth quarterAsia Pacific region resulting from the continuing unfavorable industry market conditions and the deteriorating outlook for the region and a $0.5 million charge in the Latin America region to write-down property, plant and equipment associated with the wind-down of our operations in Uruguay. In 2015, we recognized a $2.6 million non-cash impairment charge for assets, following our decision to exit a drilling fluids facility.Wefacility.recoverable;recoverable, the amount of impairment loss is determined by comparing the carrying value to the estimated fair value. Estimating future net cash flows requires us to make judgments regarding long-term forecasts of future revenues and costs related to the assets subject to review. These forecasts are uncertain in that they require assumptions about demand for our products and services, future market conditions and technological developments. If changes in these assumptions occur, our expectations regarding future net cash flows may change such that a material impairment could result.20152016 and 2014,2015, total insurance reserves were $2.7 million and $3.4 million, and $4.2 million, respectively.$40.3$51.2 million and $39.4$40.3 million at December 31, 20152016 and 2014,2015, respectively. A valuation allowance must be established to offset a deferred tax asset if, based on available evidence, it is more likely than not that some or all of the deferred tax asset will not be realized. We have considered future taxable income and tax planning strategies in assessing the need for our valuation allowance. At December 31, 2015,2016, a total valuation allowance of $16.8$21.8 million was recorded, which includes a valuation allowance on $13.1$17.4 million of net operating loss carryforwards for certain U.S. state and foreign jurisdictions, including Brazil and Australia. Changes in the expected future generation of qualifying taxable income within these jurisdictions or in the realizability of other tax assets may result in an adjustment to the valuation allowance, which would be charged or credited to income in the period this determination was made. In 2015, we decreased the valuation allowance related to Brazil as we were able to utilize certain net operating loss carryforwards related to income in 2015 from the forgiveness of certain inter-company balances due from our Brazilian subsidiary. In addition, in 2015,2016, we recognized an increase in the valuation allowance for deferred tax assets, primarily related to our Australian subsidiary and certain U.S. state net operating losses, which are no longernot expected to be realized.20112012 and for substantially all foreign jurisdictions for years prior to 2007.2008. We are not currently under examination by anythe United States federal or state tax authorities howeverfor tax years 2014 and 2015 and by the State of Texas for tax years 2012 through 2015. In addition, we are under examination by various tax authorities in other countries. We fully cooperate with all audits, but defend existing positions vigorously. These audits are in various stages of completion and certain foreign jurisdictions have challenged the amount of taxes due for certain tax periods. We evaluate the potential exposure associated with various filing positions and record a liability for tax contingencies as circumstances warrant. Although we believe all tax positions are reasonable and properly reported in accordance with applicable tax laws and regulations in effect during the periods involved, the final determination of tax audits and any related litigation could be materially different than that which is reflected in historical income tax provisions and tax contingency accruals.Accounting StandardsIn April 2014, the Financial Accounting Standards Board (“FASB”) issued updated guidance that changes the criteria for reporting discontinued operations including enhanced disclosure requirements. Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. Those strategic shifts should have a major effect on the organization’s operations and financial results. The new guidance was effective for us in the first quarter of 2015; however, the adoption did not have a material effect on our consolidated financial statements.In April and August 2015, the FASB issued updated guidance that changes the presentation of debt issuance costs in financial statements. Under the new guidance, an entity is required to present debt issuance costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset, except for debt issuance costs related to revolving debt agreements, which may continue to be presented as an asset. Amortization of the costs will continue to be reported as interest expense. The new guidance would have been effective for us in the first quarter of 2016, however, as permitted, we elected to early adopt the new guidance retrospectively in 2015. As such, we have reclassified the presentation of debt issuance costs as a direct deduction from the related debt liability, except for debt issuance costs related to our revolving debt agreements, in each of the accompanying balance sheets and related disclosures.In November 2015, the FASB issued updated guidance to simplify the balance sheet classification of deferred taxes. Under the new guidance, an entity is required to present deferred tax assets and liabilities as noncurrent in the balance sheet based on an analysis of each taxpaying component within a jurisdiction. The new guidance would have been effective for us in the first quarter of 2017, however, as permitted, we elected to early adopt the new guidance retrospectively in 2015. As such, we have reclassified the presentation of deferred tax assets and liabilities as noncurrent in each of the accompanying balance sheets and related disclosures.In July 2015, the FASB deferred the effective date of the new guidance by one year and provided entities the option to early adopt the new guidance. The new guidance is effective for us in the first quarter of 2018 with early adoption permitted in the first quarter of 2017.2018. The amendments may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of initial application. We are currently evaluatingWhile we have not fully completed our evaluation of the impactimpacts of these amendments, includingwe do not currently anticipate that the adoption and transition alternativeswill have a material impact on our consolidated financial statements. prospectively for us in the first quarter of 20172019 with early adoption permitted. Based on our current lease portfolio, we anticipate the new guidance will require us to reflect additional assets and liabilities in our consolidated balance sheet, however, we have not yet completed an estimation of such amount and we are still evaluating the overall impact of the new guidance on our consolidated financial statements.In September 2015, the FASB issued updated guidance that eliminates the requirement to restate prior periods to reflect adjustments made to provisional amounts recognized in a business combination. The new guidance requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The new guidance is effective prospectively for us in the first quarter of 2016.ITEM 7A.Quantitative and Qualitative Disclosures about Market Risk2015,2016, we had total debt outstanding of $178.6$183.6 million, including $172.5$83.3 million of borrowings under our SeniorConvertible Notes bearingdue 2017 and $100.0 million of borrowings under our Convertible Notes due 2021, both of which bear interest at a fixed rate of 4.0%4%. VariableWe did not have any variable rate debt totaled $7.4 million which relates to our foreign operations under lines of credit and other borrowings. At theoutstanding at December 31, 2015 balance,2016. Borrowings under our ABL Facility are subject to a 200 basis point increase in marketvariable interest rates during 2015 would cause our annual interest expense to increase approximately $0.1 million.poundpounds and Brazilian reais. Historically, we have not used off-balance sheet financial hedging instruments to manage foreign currency risks when we enter into a transaction denominated in a currency other than our local currencies.$142.8$161.7 million and $133.3$142.8 million at December 31, 20152016 and 2014,2015, respectively. It is not practicable to determine the amount of federal income taxes, if any, that might become due if such earnings are repatriated. We have the ability and intent to leave these foreign earnings permanently reinvested abroad. ITEM 8.Financial Statements and Supplementary Data20152016 and 2014,2015, and the related consolidated statements of income,operations, comprehensive income (loss), stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2015.2016. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the financial statements based on our audits.20152016 and 2014,2015, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2015,2016, in conformity with accounting principles generally accepted in the United States of America.As discussed in Note 1to the financial statements, the Company changed its method of accounting for debt issuance costs effective January 1, 2014 due to the adoption of FASB ASU 2015-03,Simplifying the Presentation of Debt Issuance Costs. Additionally, as discussed in Note 1 to the financial statements, the Company changed its method of accounting for deferred income taxes effective January 1, 2014 due to the adoption of FASB ASU 2015-17,Balance Sheet Classification of Deferred Taxes.2015,2016, based on the criteria established inInternal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 26, 201624, 2017 expressed an unqualified opinion on the Company’s internal control over financial reporting.Houston, TexasFebruary 26, 2016 $ 107,138 $ 85,052 206,364 318,600 163,657 196,556 29,219 12,615 506,378 612,823 307,632 283,361 19,009 91,893 11,051 15,666 1,821 1,857 3,002 2,072 $ 848,893 $ 1,007,672 $ 7,382 $ 11,648 72,211 108,242 45,835 52,835 125,428 172,725 171,211 170,462 26,368 27,787 5,627 11,240 328,634 382,214 994 992 533,746 521,228 (58,276 ) (31,992 ) 171,788 262,616 (127,993 ) (127,386 ) 520,259 625,458 $ 848,893 $ 1,007,672 (In thousands, except share data) 2016 2015 ASSETS Cash and cash equivalents $ 87,878 $ 107,138 Receivables, net 214,307 206,364 Inventories 143,612 163,657 Prepaid expenses and other current assets 17,143 29,219 Total current assets 462,940 506,378 Property, plant and equipment, net 303,654 307,632 Goodwill 19,995 19,009 Other intangible assets, net 6,067 11,051 Deferred tax assets 1,747 1,821 Other assets 3,780 3,002 Total assets $ 798,183 $ 848,893 LIABILITIES AND STOCKHOLDERS’ EQUITY Current debt $ 83,368 $ 7,382 Accounts payable 65,281 72,211 Accrued liabilities 31,152 45,835 Total current liabilities 179,801 125,428 Long-term debt, less current portion 72,900 171,211 Deferred tax liabilities 38,743 26,368 Other noncurrent liabilities 6,196 5,627 Total liabilities 297,640 328,634 Commitments and contingencies (Note 15) Common stock, $0.01 par value, 200,000,000 shares authorized and 99,843,094 and 99,377,391 shares issued, respectively 998 994 Paid-in capital 558,966 533,746 Accumulated other comprehensive loss (63,208 ) (58,276 ) Retained earnings 129,873 171,788 Treasury stock, at cost; 15,162,050 and 15,302,345 shares, respectively (126,086 ) (127,993 ) Total stockholders’ equity 500,543 520,259 Total liabilities and stockholders' equity $ 798,183 $ 848,893 $ 676,865 $ 1,118,416 $ 1,042,356 599,013 876,999 858,467 101,032 112,648 93,657 (2,426 ) (1,827 ) (4,213 ) 78,345 - - (99,099 ) 130,596 94,445 4,016 108 1,819 9,111 10,431 11,279 (112,226 ) 120,057 81,347 (21,398 ) 41,048 28,725 (90,828 ) 79,009 52,622 - 1,152 12,701 - 22,117 - $ (90,828 ) $ 102,278 $ 65,323 $ (1.10 ) $ 0.95 $ 0.62 - 0.28 0.15 $ (1.10 ) $ 1.23 $ 0.77 $ (1.10 ) $ 0.84 $ 0.56 - 0.23 0.13 $ (1.10 ) $ 1.07 $ 0.69 (In thousands, except per share data) 2016 2015 2014 Revenues $ 471,496 $ 676,865 $ 1,118,416 Cost of revenues 437,836 599,013 876,999 Selling, general and administrative expenses 88,473 101,032 112,648 Other operating income, net (4,345 ) (2,426 ) (1,827 ) Impairments and other charges 6,745 78,345 — Operating income (loss) (57,213 ) (99,099 ) 130,596 Foreign currency exchange (gain) loss (710 ) 4,016 108 Interest expense, net 9,866 9,111 10,431 Gain on extinguishment of debt (1,615 ) — — Income (loss) from continuing operations before income taxes (64,754 ) (112,226 ) 120,057 Provision (benefit) for income taxes (24,042 ) (21,398 ) 41,048 Income (loss) from continuing operations (40,712 ) (90,828 ) 79,009 Income from discontinued operations, net of tax — — 1,152 Gain from disposal of discontinued operations, net of tax — — 22,117 Net income (loss) $ (40,712 ) $ (90,828 ) $ 102,278 Income (loss) per common share - basic: Income (loss) from continuing operations $ (0.49 ) $ (1.10 ) $ 0.95 Income from discontinued operations — — 0.28 Net income (loss) $ (0.49 ) $ (1.10 ) $ 1.23 Income (loss) per common share - diluted: Income (loss) from continuing operations $ (0.49 ) $ (1.10 ) $ 0.84 Income from discontinued operations — — 0.23 Net income (loss) $ (0.49 ) $ (1.10 ) $ 1.07
(Loss) $ (90,828 ) $ 102,278 $ 65,323 (26,284 ) (22,508 ) (8,750 ) $ (117,112 ) $ 79,770 $ 56,573 (In thousands) 2016 2015 2014 Net income (loss) $ (40,712 ) $ (90,828 ) $ 102,278 Foreign currency translation adjustments (4,932 ) (26,284 ) (22,508 ) Comprehensive income (loss) $ (45,644 ) $ (117,112 ) $ 79,770 $ 957 $ 484,962 $ (734 ) $ 95,015 $ (66,622 ) 513,578 - - - 65,323 - 65,323 23 8,284 - - (2,120 ) 6,187 - 9,699 - - - 9,699 - 1,730 - - - 1,730 - - - - (6,713 ) (6,713 ) - - (8,750 ) - - (8,750 ) 980 504,675 (9,484 ) 160,338 (75,455 ) 581,054 - - - 102,278 - 102,278 12 2,970 - - (1,335 ) 1,647 - 12,411 - - - 12,411 - 1,172 - - - 1,172 - - - - (50,596 ) (50,596 ) - - (22,508 ) - - (22,508 ) 992 521,228 (31,992 ) 262,616 (127,386 ) 625,458 - - - (90,828 ) - (90,828 ) 2 (402 ) - - (607 ) (1,007 ) - 14,202 - - - 14,202 - (412 ) - - - (412 ) - - (26,284 ) - - (26,284 ) - (870 ) - - - (870 ) $ 994 $ 533,746 $ (58,276 ) $ 171,788 $ (127,993 ) $ 520,259 (In thousands) Common
Stock Paid-In
Capital Accumulated
Other
Comprehensive
Loss Retained
Earnings Treasury
Stock Total Balance at January 1, 2014 $ 980 $ 504,675 $ (9,484 ) $ 160,338 $ (75,455 ) $ 581,054 Net income — — — 102,278 — 102,278 Employee stock options, restricted stock and employee stock purchase plan 12 2,970 — — (1,335 ) 1,647 Stock-based compensation expense — 12,411 — — — 12,411 Income tax effect, net, of employee stock related activity — 1,172 — — — 1,172 Treasury shares purchased at cost — — — — (50,596 ) (50,596 ) Foreign currency translation — — (22,508 ) — — (22,508 ) Balance at December 31, 2014 992 521,228 (31,992 ) 262,616 (127,386 ) 625,458 Net loss — — — (90,828 ) — (90,828 ) Employee stock options, restricted stock and employee stock purchase plan 2 (402 ) — — (607 ) (1,007 ) Stock-based compensation expense — 14,202 — — — 14,202 Income tax effect, net, of employee stock related activity — (412 ) — — — (412 ) Foreign currency translation — — (26,284 ) — — (26,284 ) Other — (870 ) — — — (870 ) Balance at December 31, 2015 994 533,746 (58,276 ) 171,788 (127,993 ) 520,259 Net loss — — — (40,712 ) — (40,712 ) Employee stock options, restricted stock and employee stock purchase plan 4 (478 ) — (1,203 ) 1,907 230 Stock-based compensation expense — 12,056 — — — 12,056 Income tax effect, net, of employee stock related activity — (1,558 ) — — — (1,558 ) Issuance of Convertible Notes due 2021 — 15,200 — — — 15,200 Foreign currency translation — — (4,932 ) — — (4,932 ) Balance at December 31, 2016 $ 998 $ 558,966 $ (63,208 ) $ 129,873 $ (126,086 ) $ 500,543 $ (90,828 ) $ 102,278 $ 65,323 75,508 - 176 43,917 42,030 44,198 14,202 12,304 9,699 (503 ) (2,328 ) (7,832 ) 1,886 1,252 416 - (33,974 ) - (1,364 ) (1,369 ) (3,178 ) (204 ) (1,278 ) (2,146 ) 122,399 (53,494 ) 32,172 21,309 (14,136 ) 16,431 1,191 (546 ) 4,574 (31,974 ) 23,606 (17,733 ) (34,022 ) 14,828 9,803 121,517 89,173 151,903 (69,404 ) (106,973 ) (67,929 ) (17,485 ) - - 2,523 3,205 1,313 - 89,766 13,329 - - (6,776 ) (84,366 ) (14,002 ) (60,063 ) 11,036 62,164 254,390 (12,544 ) (62,445 ) (328,086 ) (2,023 ) - - (1,673 ) (467 ) (25 ) 553 3,442 8,328 (2,283 ) (53,130 ) (9,281 ) 204 1,278 2,146 (6,730 ) (49,158 ) (72,528 ) (8,335 ) (6,801 ) (318 ) 22,086 19,212 18,994 85,052 65,840 46,846 $ 107,138 $ 85,052 $ 65,840 $ 10,866 $ 56,568 $ 31,101 $ 8,464 $ 9,865 $ 10,189 (In thousands) 2016 2015 2014 Cash flows from operating activities: Net income (loss) $ (40,712 ) $ (90,828 ) $ 102,278 Adjustments to reconcile net income to net cash provided by operations: Impairments and other non-cash charges 12,523 75,508 — Depreciation and amortization 37,955 43,917 42,030 Stock-based compensation expense 12,056 14,202 12,304 Provision for deferred income taxes 3,352 (503 ) (2,328 ) Net provision for doubtful accounts 2,416 1,886 1,252 Gain on sale of a business — — (33,974 ) Gain on sale of assets (2,820 ) (1,364 ) (1,369 ) Gain on extinguishment of debt (1,615 ) — — Excess tax benefit from stock-based compensation — (204 ) (1,278 ) Change in assets and liabilities: (Increase) decrease in receivables (1,699 ) 122,399 (53,494 ) (Increase) decrease in inventories 16,044 21,309 (14,136 ) (Increase) decrease in other assets 2,639 1,191 (546 ) Increase (decrease) in accounts payable (5,213 ) (31,974 ) 23,606 Increase (decrease) in accrued liabilities and other (23,831 ) (34,022 ) 14,828 Net cash provided by operating activities 11,095 121,517 89,173 Cash flows from investing activities: Capital expenditures (38,440 ) (69,404 ) (106,973 ) Decrease (increase) in restricted cash 10,060 (17,485 ) — Proceeds from sale of property, plant and equipment 4,540 2,523 3,205 Proceeds from sale of a business — — 89,766 Business acquisitions, net of cash acquired (4,420 ) — — Net cash used in investing activities (28,260 ) (84,366 ) (14,002 ) Cash flows from financing activities: Borrowings on lines of credit 6,437 11,036 62,164 Payments on lines of credit (14,269 ) (12,544 ) (62,445 ) Proceeds from Convertible Notes due 2021 100,000 — — Purchases of Convertible Notes due 2017 (87,271 ) — — Debt issuance costs (5,403 ) (2,023 ) — Other financing activities 357 (1,673 ) (467 ) Proceeds from employee stock plans 725 553 3,442 Purchases of treasury stock (1,226 ) (2,283 ) (53,130 ) Excess tax benefit from stock-based compensation — 204 1,278 Net cash used in financing activities (650 ) (6,730 ) (49,158 ) Effect of exchange rate changes on cash (1,445 ) (8,335 ) (6,801 ) Net increase (decease) in cash and cash equivalents (19,260 ) 22,086 19,212 Cash and cash equivalents at beginning of year 107,138 85,052 65,840 Cash and cash equivalents at end of year $ 87,878 $ 107,138 $ 85,052 Cash paid (received) for: Income taxes (net of refunds) $ (20,709 ) $ 10,866 $ 56,568 Interest $ 8,802 $ 8,464 $ 9,865 oil and gas industry supplier providing products and services primarily to the oil and gas exploration and production (“E&P”) industry. We operate our business through two reportable segments: Fluids Systems and Mats and Integrated Services. Our Fluids Systems segment provides customized drilling fluids solutions to E&P customers globally, operating through four geographic regions: North America, Europe, the Middle East and Africa (“EMEA”), Latin America, and Asia Pacific. Our Mats and Integrated Services segment provides composite mat rentals, as well siteas location construction and related site services to oil and gas customers at well, production, transportation and refinery locations in the U.S.customers. In addition, mat rental and services activity is expanding into applications in other markets, including electrical transmission & distribution, pipeline, solar, petrochemical and construction industries including petrochemicals, utilities,across the U.S., Canada and pipeline.United Kingdom. We also sell composite mats to E&P customers outside of the U.S., and to domestic customers outside of the oil and gas industry.primarilyto a large extent, on oil and gas drilling activity levels in the markets we serve.serve, and particularly for the Fluids Systems segment, the nature of the drilling operations (including the depth and whether the wells are drilled vertically or horizontally) which governs the revenue potential of each well. Drilling activity, in turn, depends on oil and gas commodity pricing, inventory levels, product demand and regulatory restrictions. Oil and gas prices and activity are cyclical and volatile. This market volatility has a significant impact on our operating results.cash.cash and is included in other current assets in the accompanying balance sheet.NEWPARK RESOURCES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)the assetsan asset are capitalized. We capitalize interest costs on significant capital projects. Maintenance and repairs are charged to expenseexpensed as incurred. The costSales and disposals of property, plant and equipment sold or otherwise disposed of and theare removed at carrying cost less accumulated depreciation thereon are eliminated from the property and related accumulated depreciation accounts, andwith any resulting gain or loss is credited or charged to income.reflected in earnings.For financial reporting purposes, depreciation3 5 years 3 10 years 5 7 years 7 10 years 7 12 years 5 15 years 20 39 years Lease term, including reasonably assured renewal periods Computer hardware and office equipment 3-5 years Computer software 3-10 years Autos & light trucks 5-7 years Furniture, fixtures & trailers 7-10 years Composite mats (rental fleet) 10-12 years Machinery and heavy equipment 5-15 years Owned buildings 20-39 years Leasehold improvements Lease term, including reasonably assured renewal periods acquired.acquired in business combinations. Goodwill and other intangible assets with indefinite lives are not amortized. Intangible assets with finite useful lives are amortized either on a straight-line basis over the asset’s estimated useful life or on a basis that reflects the pattern in which the economic benefits of the asset are realized. Any period costs of maintaining intangible assets are expensed as incurred.Stock.Stock. Treasury stock is carried at cost, which includes the entire cost of the acquired stock.NEWPARK RESOURCES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)Stock-BasedShare-Based Compensation. All share-based payments to employees, including grantsShare-based compensation cost is measured at the grant date based on the fair value of employee stock options, are recognizedthe award, net of an estimated forfeiture rate. We recognize these costs in the income statement based on their fair values. We useusing the straight-line method over the vesting term. Fair value at the grant date is determined using the Black-Scholes option-pricing model for measuring the fair value of stock options granted and recognize stock-based compensation based on the grant date fair value, net of an estimated forfeiture rate, for all share-based awards, on a straight-line basis over the vesting term. Performance-based restricted stock units are valued at the date of grant using the Monte Carlo valuation model.model for performance-based restricted stock units.20152016 and 2014,2015, accumulated other comprehensive loss related to foreign subsidiaries reflected in stockholders’ equity amounted to $63.2 million and $58.3 million, respectively.$32.0 million, respectively.bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:Reclassifications. Certain prior year amounts have been reclassified to conform to the current year presentation.Standards.PronouncementsApril 2014,September 2015, the Financial Accounting Standards Board (“FASB”) issued updated guidance that changeseliminates the criteria for reporting discontinued operations including enhanced disclosure requirements. Under therequirement to restate prior periods to reflect adjustments made to provisional amounts recognized in a business combination. The new guidance only disposals representing a strategic shiftrequires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in operations should be presented as discontinued operations. Those strategic shifts should have a major effect on the organization´s operations and financial results.reporting period in which the adjustment amounts are determined. The new guidance was effective for us prospectively in the first quarter of 2015;2016; however, the adoption did not have a materialany effect on our consolidated financial statements.
Standards not yet adoptedNEWPARK RESOURCES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)In April and August 2015, the FASB issued updated guidance that changes the presentation of debt issuance costs in financial statements. Under the new guidance, an entity is required to present debt issuance costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset, except for debt issuance costs related to revolving debt agreements, which may continue to be presented as an asset. Amortization of the costs will continue to be reported as interest expense. The new guidance would have been effective for us in the first quarter of 2016, however, as permitted, we elected to early adopt the new guidance retrospectively in 2015. As such, we have reclassified the presentation of debt issuance costs as a direct deduction from the related debt liability, except for debt issuance costs related to our revolving debt agreements, in each of the accompanying balance sheets and related disclosures.In November 2015, the FASB issued updated guidance to simplify the balance sheet classification of deferred taxes. Under the new guidance, an entity is required to present deferred tax assets and liabilities as noncurrent in the balance sheet based on an analysis of each taxpaying component within a jurisdiction. The new guidance would have been effective for us in the first quarter of 2017, however, as permitted, we elected to early adopt the new guidance retrospectively in 2015. As such, we have reclassified the presentation of deferred tax assets and liabilities as noncurrent in each of the accompanying balance sheets and related disclosures.In July 2015, the FASB deferred the effective date of the new guidance by one year and provided entities the option to early adopt the new guidance. The new guidance is effective for us in the first quarter of 2018 with early adoption permitted in the first quarter of 2017.2018. The amendments may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of initial application. We are currently evaluatingWhile we have not fully completed our evaluation of the impactimpacts of these amendments, includingwe do not currently anticipate that the adoption and transition alternativeswill have a material impact on prospectively for us in the first quarter of 20172019 with early adoption permitted. Based on our current lease portfolio, we anticipate the new guidance will require us to reflect additional assets and liabilities in our consolidated balance sheet, however, we have not yet completed an estimation of such amount and we are still evaluating the overall impact of the new guidance on our consolidated financial statements.In September 2015, the FASB issued updated guidance that eliminates the requirement to restate prior periods to reflect adjustments made to provisional amounts recognized in a business combination. The new guidance requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The new guidance is effective prospectively for us in the first quarter of 2016.Note 2 — Discontinued OperationsIn 2013, we initiated a process to sell our Environmental Services business, and in March of 2014 we completed the sale of the business for $100 million in cash, subject to adjustment based on actual working capital conveyed at closing. Cash proceeds from the sale were $89.8 million in 2014, net of transaction related expenses, including the adjustment related to final working capital conveyed at closing. The agreement significantly limits our post-closing environmental obligations, including those related to the waste transfer and disposal facilities. In addition, $8 million of the sales price was withheld in escrow associated with transaction representations, warranties and indemnities, with $4 million scheduled to be released at each of the nine-month and 18-month anniversary of the closing. In December 2014, the buyer made certain claims for indemnification under the terms of the agreement, which defers the release of the escrow funds until such claims are resolved. Further discussion of the buyer’s claims and related litigation is contained in Note 14. As a result of the sale transaction, we recorded a gain on the disposal of the business of $34.0 million ($22.1 million after-tax) in the first quarter of 2014. The results of operations for this business have been classified as discontinued operations for all periods presented.Summarizedfrom discontinuedof Pragmatic are reported within the Fluids Systems segment for the period subsequent to the date of the acquisition. Results of operations areand pro-forma combined results of operations for the acquired business have not been presented as follows:the effect of this acquisition is not material to our consolidated financial statements. $ 11,744 $ 65,002 1,770 17,773 1,152 12,701 33,974 - 22,117 - 2015 2014 $ 133,934 $ 152,076 657 1,531 134,591 153,607 25,343 40,971 3,723 1,978 $ 163,657 $ 196,556 (In thousands) 2016 2015 Raw materials: Drilling fluids $ 115,399 $ 133,934 Mats 1,137 657 Total raw materials 116,536 134,591 Blended drilling fluids components 23,762 25,343 Finished goods - mats 3,314 3,723 Total inventories $ 143,612 $ 163,657 requiredneeded to meet specified customer requirements.the fourth quarter2016 and 2015, charges of 2015, we recognized a$4.1 million and $2.2 million, charge reportedrespectively, are included in cost of revenues to reduce the carrying value of diesel-based drilling fluid inventory infor the Fluids Systems segment. The charge resultedsegment related to the reduction in carrying values of certain inventory, primarily resulting from lower of cost or market adjustments dueadjustments. Charges in 2016 primarily related to the declineAsia Pacific and North America regions and charges in selling prices for our diesel-based drilling fluid products coupled with declines in replacement costs of diesel fuel.NEWPARK RESOURCES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) 2016 2015 $ 11,613 $ 11,736 $ 11,505 $ 11,613 122,514 98,492 121,967 122,514 224,974 188,987 248,229 224,974 29,688 27,431 30,544 29,688 5,788 5,466 Furniture and fixtures 5,829 5,788 20,950 40,628 19,417 20,950 415,527 372,740 437,491 415,527 (164,818 ) (146,860 ) (186,700 ) (164,818 ) 250,709 225,880 250,791 250,709 100,341 90,321 100,543 100,341 (43,418 ) (32,840 ) Less accumulated depreciation - composite mats (47,680 ) (43,418 ) 56,923 57,481 52,863 56,923 $ 307,632 $ 283,361 $ 303,654 $ 307,632 $29.42014, respectively. As described in Note 1, we revised our estimated useful lives and end of life residual values for composite mats included in our rental fleet as of January 1, 2016 resulting in a decrease in depreciation expense of approximately $6.1 million for the year ended December 31, 2016. Capital expenditures in 2016 included approximately $32.3 million in 2015, 2014the Fluids Systems segment, including a total of $27.8 million related to the facility upgrade and 2013, respectively.In 2015, we incurred approximately $13 million of capital expenditures to complete the expansion of our mat manufacturingFourchon, Louisiana facility, located in Carencro, Louisiana, including aour new research and development center, bringing our cumulative investment for this expansion project to approximately $46 million. In addition, we continued two capital investment projects announced in 2014 within the Fluids Systems segment. We invested approximately $20 million in a new fluidfluids blending facility and distribution center located in Conroe, Texas, which willand equipment to support the increasing demandcontract with Total S.A. in Uruguay. Capital expenditures for the Mats and Integrated Services segment totaled $4.6 million during 2016.proprietary fluid technologies, includingFluids Systems segment resulting from the continuing unfavorable industry market conditions and the deteriorating outlook for the region and a $0.5 million non-cash charge in our Evolution systems. This project was substantially completed in 2015Fluids Systems segment to write-down property, plant and equipment associated with the start-upwind-down of blendingour operations in early 2016.Uruguay. In addition, we are investing approximately $30 million to significantly expand existing capacity and upgrade the drilling fluids blending, storage and transfer capabilities in Fourchon, Louisiana, which serves the Gulf of Mexico deepwater market. This project is expected to be completed in 2016. Capital expenditures related to these two Fluids Systems projects were approximately $26 million in 2015.In the fourth quarter of 2015, we recognized a $2.6 million charge reported in impairments and other charges related to assets at a facility in our Fluids Systems segment facility, following our decision to exit this facility.NEWPARK RESOURCES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) $ 74,591 $ 19,473 $ 94,064 (1,907 ) (264 ) (2,171 ) 72,684 19,209 91,893 (70,720 ) - (70,720 ) (1,964 ) (200 ) (2,164 ) $ - $ 19,009 $ 19,009 (In thousands) Fluids
Systems Mats and
Integrated
Services Total Balance at December 31, 2014 $ 72,684 $ 19,209 $ 91,893 Impairment (70,720 ) — (70,720 ) Effects of foreign currency (1,964 ) (200 ) (2,164 ) Balance at December 31, 2015 — 19,009 19,009 Acquisition 1,720 — 1,720 Effects of foreign currency (54 ) (680 ) (734 ) Balance at December 31, 2016 1,666 18,329 19,995 approach.approach (classified within level 3 of the fair value hierarchy). We also compare the aggregate fair values of our reporting units with our market capitalization. In the third quarter of 2015, primarily as a result of the ongoing weakness in commodity prices, further decreases in U.S. drilling activities, and increased expectations that the current weakness in U.S. drilling activities would persist for a longer period, along with a significant decline in the quoted market prices ofWe completed our common stock, we considered these developments at that time to be an indicator of impairment that required us to complete an interim goodwill impairment evaluation. As such, during the third quarter of 2015, we estimated the fair values for each of our reporting units based on our current forecasts and expectations for market conditions at that time and determined that even though the estimated fair values for each reporting unit had decreased in 2015, each reporting unit’s fair value remained in excess of its net carrying value, and therefore, no impairment was required.In the fourth quarter of 2015, we completed the annual evaluation of the carrying values of our goodwill and other indefinite-lived intangible assets as of November 1, 2015. As2016 and determined that the carrying values of each of our reporting units were less than their respective fair values and therefore, no impairment was required.in the fourth quarter, including the more prolonged projection of lower commodity prices and drilling activities, as well as the further decline in the quoted market prices of our common stock, we determined that the carrying value of our drilling fluids reporting unit exceeded its estimated fair value such that goodwill was potentially impaired.value. As a result, we completed the step two of the evaluation to measure the amount of goodwill impairment determining a full impairment of goodwill related to the drilling fluids reporting unit was required. As such in the fourth quarter of 2015, we recorded a $70.7 million non-cash impairment charge to write-off the goodwill related to the drilling fluids reporting unit, which is included in impairments and other charges. In completing this annual evaluation ascharges in our consolidated statement of November 1, 2015, we also determined that the Mats & Integrated Services reporting unit did not have a fair value below its net carrying value and therefore, no impairment was required.operations. $ 5,077 $ (3,600 ) $ 1,477 $ 5,087 $ (3,277 ) $ 1,810 28,069 (19,638 ) 8,431 35,910 (24,403 ) 11,507 1,625 (975 ) 650 1,625 (650 ) 975 34,771 (24,213 ) 10,558 42,622 (28,330 ) 14,292 493 - 493 549 - 549 - - - 825 - 825 493 - 493 1,374 - 1,374 $ 35,264 $ (24,213 ) $ 11,051 $ 43,996 $ (28,330 ) $ 15,666 December 31, 2016 December 31, 2015 (In thousands) Gross
Carrying
Amount Accumulated
Amortization Other
intangible
assets, net Gross
Carrying
Amount Accumulated
Amortization Other
intangible
assets, netTechnology related $ 5,766 $ (3,873 ) $ 1,893 $ 5,077 $ (3,600 ) $ 1,477 Customer related 25,158 (21,962 ) 3,196 28,069 (19,638 ) 8,431 Employment related 1,848 (1,346 ) 502 1,625 (975 ) 650 Total amortizing intangible assets 32,772 (27,181 ) 5,591 34,771 (24,213 ) 10,558 Permits and licenses 476 — 476 493 — 493 Total indefinite-lived intangible assets 476 — 476 493 — 493 Total intangible assets $ 33,248 $ (27,181 ) $ 6,067 $ 35,264 $ (24,213 ) $ 11,051 2014 and 20132014 related to other intangible assets was $3.4 million, $4.6 million and $8.0 million, and $10.4respectively.respectively.Incharge for the fourth quarterimpairment of 2015, we reclassified $0.7 million of indefinite-lived trademarks to definite-livedcustomer related intangible assets subject to future amortization, followingin the Asia Pacific region of our decision to transitionFluids Systems segment resulting from the usecontinuing unfavorable industry market conditions and the deteriorating outlook for the region, which is included in impairments and other charges in our consolidated statement of these trademarksoperations. Also, we completed the acquisition of Pragmatic in certain international markets over2016 resulting in additions to amortizable intangible assets of $1.7 million. See Note 2 for further discussion. We used internally developed assumptions in determining the next few years. $ 223 $ 223 $ 223 $ 223 $ 195 $ 390 $ 1,477 3,183 2,362 1,035 738 533 580 8,431 325 325 - - - - 650 $ 3,731 $ 2,910 $ 1,258 $ 961 $ 728 $ 970 $ 10,558 (In thousands) 2017 2018 2019 2020 2021 Thereafter Total Technology related $ 339 $ 339 $ 339 $ 310 $ 259 $ 307 $ 1,893 Customer related 1,632 584 419 313 184 64 3,196 Employment related 437 65 — — — — 502 Total future amortization expense $ 2,408 $ 988 $ 758 $ 623 $ 443 $ 371 $ 5,591 20152016 and 2014: $ 172,497 $ 172,498 (1,296 ) (2,036 ) - - 7,392 11,648 $ 178,593 $ 182,110 (7,382 ) (11,648 ) $ 171,211 $ 170,462 (In thousands) December 31, 2016 December 31, 2015 Principal Amount Unamortized Discount and Debt Issuance Costs Total Debt Principal Amount Unamortized Discount and Debt Issuance Costs Total Debt Convertible Notes due 2017 $ 83,256 $ (268 ) $ 82,988 $ 172,497 $ (1,296 ) $ 171,201 Convertible Notes due 2021 100,000 (27,100 ) 72,900 — — — Revolving credit facility — — — — — — ABL Facility — — — — — — Other debt 380 — 380 7,392 — 7,392 Total debt 183,636 (27,368 ) 156,268 179,889 (1,296 ) 178,593 Less: current portion (83,636 ) 268 (83,368 ) (7,382 ) — (7,382 ) Long-term debt $ 100,000 $ (27,100 ) $ 72,900 $ 172,507 $ (1,296 ) $ 171,211 Our financing arrangements include In September 2010, we issued $172.5 million of unsecured convertible senior notes (“Senior Notes”Convertible Notes due 2017”) and a $150.0that mature on October 1, 2017, of which, $83.3 million revolving credit facility which, subject to the conditions contained therein can be increased to a maximum capacity of $275.0 million. Ataggregate principal amount was outstanding at December 31, 2015, we had no outstanding borrowings under the revolving credit facility. Additionally, our foreign operations had $7.4 million outstanding under lines of credit and other borrowings.2016. The Senior Notesnotes bear interest at a rate of 4.0% per year, payable semi-annuallysemiannually in arrears on April 1 and October 1 of each year. Holders may convert the Senior Notesnotes at their option at any time prior to the close of business on the business day immediately preceding the October 1, 2017 maturity date. The conversion rate is initially 90.8893 shares of our common stock per $1,000 principal amount of Senior Notesnotes (equivalent to an initial conversion price of $11.00 per share of common stock), subject to adjustment in certain circumstances. Upon conversion, the Senior Notesnotes will be settled in shares of our common stock. In 2015, holders converted an insignificant amount of Senior Notes into shares of our common stock. We may not redeem the Senior Notesnotes prior to their maturity date. In February 2016, we repurchased $11.2$89.3 million aggregate principal amount of our convertible senior notes in the open marketConvertible Notes due 2017 for $9.2$87.3 million under our existing Board authorized repurchase programand will recognizerecognized a net gain in 2016 forof $1.6 million reflecting the difference in the amount paid and the net carrying value of the extinguished debt.debt, including debt issuance costs. We intend to use available cash on-hand, cash generated by operations, including U.S. income tax refunds, and estimated availability under our ABL Facility to repay the remaining Convertible Notes due 2017.providesprovided for a $200$200.0 million revolving loan facility available for borrowings and letters of credit and expires inthrough March 2020. In December 2015, the Credit Agreement was amended, decreasing the revolving credit facility to $150.0 million and subsequently, we terminated the Credit Agreement in May 2016, replacing it with an asset-based revolving loan facility as discussed further below. As of the date of termination, we had no outstanding borrowings under the Credit Agreement. In the second quarter of 2016, we recognized a non-cash charge of $1.1 million in interest expense for the write-off of debt issuance costs in connection with the termination.First Amendment to Third Amended and Restated Credit Agreement (“Amendment”) decreasingmaximum capacity of $150.0 million. The ABL Facility terminates on March 6, 2020; however, the revolving loan facility to $150 million, modifying certain financial covenants through the first quarter of 2017, and modifying the borrowing cost and fee provisions. The Credit AgreementABL Facility has a springing maturity date that will accelerate the maturity of the credit facility to June 30, 2017 if, prior to such date, the SeniorConvertible Notes due 2017 have not either been repurchased, redeemed, converted and/or refinanced in full or the Company haswe have not provided sufficient funds to an escrow agent to repay the SeniorConvertible Notes due 2017 in full on their maturity date. For this purpose, funds may be provided in cash to an escrow agent or a combination of cash to an escrow agent and the assignment of a portion of availability under the ABL Facility. The ABL Facility requires compliance with a minimum fixed charge coverage ratio and minimum unused availability of $25.0 million to utilize borrowings or assignment of availability under the ABL Facility towards funding the repayment of the 2017 Convertible Notes.Amendment,ABL Facility, we canmay elect to borrow at a variable interest rate eitherplus an applicable margin based on either, (1) LIBOR subject to a floor of zero or (2) a base rate equal to the highest of: (a) the federal funds rate plus 50 basis points, (b) the prime rate of Bank of America, N.A. or (c) LIBOR, subject to a floor of zero, plus 100 basis points. The applicable margin ranges from 225 to 350 basis points for LIBOR borrowings, and 125 to 250 basis points with respect to base rate borrowings, based on our consolidated leverageEBITDA, ratio ranging from 175of debt to 325consolidated EBITDA, and consolidated fixed charge coverage ratio, each as defined in the ABL Facility. As of December 31, 2016, the applicable margin for borrowings under our ABL Facility is 350 basis points or at a variable interest rate based on the greatest of: (a) prime rate, (b) the federal funds rate in effect plus 50 basis points, or (c) the Eurodollar rate for a Eurodollar Loan with a one-month interest period plus 100 basis points, in each case plus a margin ranging from 75respect to 225 basis points based on our consolidated leverage ratio. The applicable margins on LIBOR borrowings and Eurodollar borrowings on December 31, 2015 were 250 and 150 basis points respectively.with respect to base rate borrowings. In addition, we are required to pay a commitment fee on the unused portion of the Credit Agreement, as amended,ABL Facility ranging from 37.5 to 50.062.5 basis points, based on ourthe ratio of debt to consolidated leverage ratio.EBITDA, as defined in the ABL Facility. The applicable commitment fee onas of December 31, 20152016 was 37.562.5 basis points.Credit Agreement contains customary financial and operating covenants, including a consolidated leverage ratio, a senior secured leverage ratio and an interest coverage ratio. The Credit Agreement also limits the payment of dividends on our common stock, the repurchase of our common stock and the conversion, redemption, defeasance or refinancing of the Senior Notes.Pursuant to the Amendment, a temporary increase has been made to the consolidated leverage ratio covenant, increasing the ratio from 4.0:1.0 to 5.5:1.0 through 2016, then reducing to 4.5 in the first quarter of 2017, and returning to 4.0 thereafter. During the same period, the senior secured leverage ratio covenant is being reduced from 3.0:1.0 to 2.0:1.0 through 2016, then increasing to 2.5 in the first quarter of 2017, and returning to 3.0 thereafter. The calculation for these two ratios has also been modified to allow for up to $10 million of adjustments for severance costs, as well as foreign exchange impacts related to our Brazilian intercompany financial restructuring. At December 31, 2015, we have not utilized any of this $10 million adjustment allowance in determining the available borrowing capacity under the Credit Agreement or in the calculation of the financial ratios disclosed below.At December 31, 2015, considering our current financial covenant ratios disclosed below, we had $16.7 million of borrowing capacity available under our Credit Agreement, without taking into account any available adjustments described above, which, if utilized, could increase the availability under our Credit Agreement. The Credit AgreementABL Facility is a senior secured obligation, secured by first liens on all of our U.S. tangible and intangible assets. Additionally, the Credit Agreement is guaranteed by certain of our U.S. subsidiariesassets and a portion of the capital stock of our non-U.S. subsidiaries has also been pledged as collateral.NEWPARK RESOURCES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)financialABL Facility contains customary operating covenants under our Credit Agreement followingand certain restrictions including, among other things, the December 2015 Amendmentincurrence of additional debt, liens, dividends, asset sales, investments, mergers, acquisitions, affiliate transactions, stock repurchases and the applicable ratios as of the dates indicated, are as follows: 2.50 minimum 3.90 9.62 17.63 5.50 maximum 5.03 2.07 1.12 2.00 maximum 0.21 0.07 0.19 We were inother restricted payments. The ABL Facility also requires compliance with all financial covenants asa fixed charge coverage ratio if availability under the ABL Facility falls below $25.0 million. In addition, the ABL Facility contains customary events of December 31, 2015. However, continued compliance with our covenants, particularly the consolidated leverage ratio, is largely dependent on our ability to generate sufficient levels of EBITDA, as defined in the Credit Agreement, as amended, or reduce our debt levels. Based upon our current and expected financial condition, and our forecasted results of operations, we anticipate having difficulty remaining in compliance with the financial covenants as of the end of the first quarter and throughout 2016, particularly if market conditions deteriorate further. Asdefault, including, without limitation, a result, we have initiated discussions with our lead bank in an effort to explore our options, which may include a waiver or amendment to our Credit Agreement. Any waiver or amendment to the Credit Agreement may increase the cost of our borrowings and impose additional limitations over certain types of activities. However, there is no certainty that we will be able to obtain any such relief. Any failure to comply with such financial covenants would result in an eventmake payments under the facility, acceleration of default under our Credit Agreement if we are unable to obtain a waiver or amendment on a timely basis. While no amounts are currently outstanding under our Credit Agreement, an eventmore than $25.0 million of default would prevent us from borrowing under our Credit Agreementother indebtedness, certain bankruptcy events and could result in our having to immediately repay all amounts outstanding, if any, under our Credit Agreement. In the event any outstanding amountscertain change of indebtedness in excess of $25 million are accelerated, this could also cause a default under our Senior Notes.At December 31, 2015, we had letters of credit issued and outstanding which totaled $14.8 million that are collateralized by $15.5 million in restricted cash. Additionally, our foreign operations had $7.4 million outstanding under lines of credit and other borrowings, as well as $10.4 million outstanding in letters of credit and other guarantees with certain letters of credit that are collateralized by $2.0 million in restricted cash. At December 31, 2015, this restricted cash totaling $17.5 million was included in other current assets in the accompanying balance sheet.primarily those in Italy Brazil and India, maintain local credit arrangements consisting primarily of lines of credit with several banks, which are renewed on an annual basis. In December 2016, we terminated our revolving line of credit in Brazil and repaid the outstanding balance. We utilize local financing arrangements in our foreign operations in order to provide short-term local liquidity needs, as well as to reduce the net investment in foreign operations subject to foreign currency risk.needs. Advances under these short-term credit arrangements are typically based on a percentage of the subsidiary’s accounts receivable or firm contracts with certain customers. The weighted average interest rateTotal outstanding balances under these arrangements was 14.9% and 15.1% onother domestic financing arrangements were $0.4 million and $7.4 million at December 31, 2016 and 2015, respectively.outstanding balancesrestricted cash of $7.4 million and $11.4$17.5 million, at December 31, 2015 and 2014, respectively.$10.4 million, and $11.3$10.4 million for the years ended December 31, 2016, 2015 2014 and 2013,2014, respectively. Capitalized interest was $0.9 million, $1.1 million and $0.8 million for the years ended December 31, 2016, 2015 and 2014 respectively. Scheduled repayment of all long-term debt as of December 31, 20152016 is $172.5$100.0 million in 2017.NEWPARK RESOURCES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)SeniorConvertible Notes due 2017 and our Convertible Notes due 2021, approximated their fair values at December 31, 20152016 and December 31, 2014.2015. The estimated fair value of our SeniorConvertible Notes due 2017 was $84.4 million at December 31, 2016 and $154.4 million at December 31, 2015, and $192.3the estimated fair value of our Convertible Notes due 2021 was $110.5 million at December 31, 2014,2016, based on quoted market prices at these respective dates.2015,2016, substantially all of our cash deposits are held in accounts at numerous financial institutions across the various regions that we operate in. A majority of the cash is held in accounts that maintain deposit ratings of P-1 by Moody’s, A-1 by Standard and Poor’s, and F1 by Fitch. As part of our investment strategy, we perform periodic evaluations of the relative credit standing of these financial institutions.20152016 and 20142015 include the following: 2015 2014 $ 159,119 $ 299,962 (7,189 ) (5,458 ) 151,930 294,504 32,600 1,258 21,834 22,838 $ 206,364 $ 318,600 (In thousands) 2016 2015 Gross trade receivables $ 162,569 $ 159,119 Allowance for doubtful accounts (8,849 ) (7,189 ) Net trade receivables 153,720 151,930 Income tax receivables 39,944 32,600 Other receivables 20,643 21,834 Total receivables, net $ 214,307 $ 206,364 2015,2016, income tax receivables includes approximately $29$38.0 million related to our decision to amend prior U.S. federal income tax returns and request a refund for the carryback of the U.S. federal tax losses incurred in 2015. 2016. At December 31, 2015, income tax receivables included approximately $29.0 million related to the refund for the carryback of U.S. federal tax losses incurred in 2015, which were substantially received in 2016.include $10.4includes $11.5 million and $13.3$10.4 million for value added, goods and service taxes related to foreign jurisdictions as of December 31, 20152016 and 2014,2015, respectively. In addition, other receivables includes $8.0 million at both December 31, 2016 and 2015 and 2014 include $8.0 million associatedin connection with the March 2014 sale of the Environmental Services business that is held in escrow as describedassociated with transaction representations, warranties and indemnities. In December 2014, the buyer made certain claims for indemnification under the terms of the sale agreement, which defers the release of the escrow funds until such claims are resolved. Further discussion of the buyer’s claims and related litigation is contained in Note 2 above.During the years ended December 31,For 2016, 2015 2014 and 2013,2014, revenues from our 20 largest customers represented approximately 49%53%, 40%49% and 50%40%, respectively, of our consolidated revenues from continuing operations, althoughoperations. For 2016, revenue from Sonatrach, our primary customer in Algeria, represented approximately 14% of consolidated revenues, and as of December 31, 2016, receivables from Sonatrach were approximately 14% of net trade receivables. For 2015 and 2014, no single customer accounted for more than 10% of our consolidated revenues.2014 and 20132014 related to continuing operations, was as follows: 2015 2014 2013 $ 5,458 $ 4,142 $ 3,950 1,886 1,246 309 (155 ) 70 (117 ) $ 7,189 $ 5,458 $ 4,142 (In thousands) 2016 2015 2014 Balance at beginning of year $ 7,189 $ 5,458 $ 4,142 Provision for uncollectible accounts 2,416 1,886 1,246 Write-offs, net of recoveries (756 ) (155 ) 70 Balance at end of year $ 8,849 $ 7,189 $ 5,458 included in this Item 8 of these Financial Statements and Supplementary Data also includes an insignificant provision for uncollectible accounts in 2014 related to the Environmental Services business that is classified as discontinued operations. Year Ended December 31, 2016 2015 2014 Current: $ (32,272 ) $ 17,086 $ 24,275 $ (37,854 ) $ (32,272 ) $ 17,086 (34 ) 2,170 1,595 20 (34 ) 2,170 11,411 9,925 7,085 10,440 11,411 9,925 (20,895 ) 29,181 32,955 (27,394 ) (20,895 ) 29,181 Deferred: (2,624 ) 12,237 (2,057 ) 2,670 (2,624 ) 12,237 179 (174 ) (598 ) (181 ) 179 (174 ) 1,942 (196 ) (1,575 ) 863 1,942 (196 ) (503 ) 11,867 (4,230 ) 3,352 (503 ) 11,867 $ (21,398 ) $ 41,048 $ 28,725 Total income tax expense (benefit) $ (24,042 ) $ (21,398 ) $ 41,048 $ (21,398 ) $ 41,048 $ 28,725 - 12,475 5,072 $ (21,398 ) $ 53,523 $ 33,797 Year Ended December 31, (In thousands) 2016 2015 2014 Income (loss) from continuing operations $ (24,042 ) $ (21,398 ) $ 41,048 Income from discontinued operations — — 12,475 Total provision (benefit) $ (24,042 ) $ (21,398 ) $ 53,523 NEWPARK RESOURCES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) $ (122,082 ) $ 88,964 $ 65,310 9,856 31,093 16,037 $ (112,226 ) $ 120,057 $ 81,347 Year Ended December 31, (In thousands) 2016 2015 2014 U.S. $ (76,805 ) $ (122,082 ) $ 88,964 Foreign 12,051 9,856 31,093 Income (loss) from continuing operations before income taxes $ (64,754 ) $ (112,226 ) $ 120,057 (35.0 %) 35.0 % 35.0 % 2.8 % 2.9 % 4.3 % 15.7 % - - 1.8 % (1.9 %) (2.5 %) (3.6 %) (4.3 %) (4.6 %) 2.8 % 2.1 % 3.0 % (2.2 %) 0.6 % (0.8 %) (1.5 %) 1.0 % 0.5 % 0.1 % (1.2 %) 0.4 % (19.1 %) 34.2 % 35.3 % The Company’s Year Ended December 31, 2016 2015 2014 Income tax expense (benefit) at federal statutory rate (35.0 %) (35.0 %) 35.0 % Nondeductible expenses 2.8 % 2.8 % 2.9 % Worthless stock deduction - Brazil (14.4 %) — % — % Goodwill and other asset impairments 3.5 % 15.7 % — % Manufacturing deduction 0.8 % 1.8 % (1.9 %) Different rates on earnings of foreign operations (1.2 %) (3.6 %) (4.3 %) Change in valuation allowance 6.9 % 2.8 % 2.1 % Uncertain tax positions — % (2.2 %) 0.6 % State tax expense (benefit), net (2.5 %) (1.5 %) 1.0 % Other items, net 2.0 % 0.1 % (1.2 %) Total income tax expense (benefit) (37.1 %) (19.1 %) 34.2 % the income tax provision also includes a $4.6 million charge for increases to the valuation allowance for certain deferred tax assets which may not be realized (primarily related to our Australian subsidiary and certain U.S. state net operating losses). These 2015 charges were partially offset by a $4.4 million benefit associated with the forgiveness of certain inter-company balances due from our Brazilian subsidiary and a $2.2 million benefit from the release of U.S. tax reserves, following the expiration of statutes of limitation. In addition, the 2015 income tax provision includes a $4.6 million charge for increases to the valuation allowance for certain deferred tax assets, primarily related to our Australian subsidiary and certain U.S. state net operating losses, which may not be realized, as well as a $1.6 million charge relating to management’s election to carry back the 2015 U.S. federal tax losses to prior years.NEWPARK RESOURCES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)20152016 and 20142015 are as follows: $ 14,800 $ 15,097 6,717 4,250 6,460 5,467 6,157 9,401 3,013 3,145 2,558 862 599 1,214 40,304 39,436 (16,780 ) (15,353 ) 23,524 24,083 (38,034 ) (40,308 ) (7,181 ) (6,680 ) (2,856 ) (3,025 ) (48,071 ) (50,013 ) $ (24,547 ) $ (25,930 ) $ 1,821 $ 1,857 (26,368 ) (27,787 ) $ (24,547 ) $ (25,930 ) (In thousands) 2016 2015 Deferred tax assets: Net operating losses $ 18,771 $ 14,800 Capitalized inventory costs 12,378 6,717 Stock based compensation 6,955 6,460 Accruals not currently deductible 4,883 6,157 Unrealized foreign exchange losses, net 3,087 3,013 Foreign tax credits 3,269 2,558 Other 1,871 599 Total deferred tax assets 51,214 40,304 Valuation allowance (21,847 ) (16,780 ) Total deferred tax assets, net of allowances 29,367 23,524 Deferred tax liabilities: Accelerated depreciation and amortization (43,225 ) (38,034 ) Original issue discount on Convertible Notes due 2021 (8,553 ) — Tax on unremitted earnings (8,555 ) (7,181 ) Other (6,030 ) (2,856 ) Total deferred tax liabilities (66,363 ) (48,071 ) Total net deferred tax liabilities $ (36,996 ) $ (24,547 ) Non-current deferred tax assets $ 1,747 $ 1,821 Non-current deferred tax liabilities (38,743 ) (26,368 ) Net deferred tax liabilities $ (36,996 ) $ (24,547 ) $212.8$240.5 million available to reduce future state taxable income. These NOLs expire in varying amounts beginning in year 2018 through 2030. Foreign NOLs of approximately $14.2$26.4 million are available to reduce future taxable income, some of which expire beginning in 2016.20152016 and December 31, 2014,2015, we have recorded a valuation allowance in the amount of $16.8$21.8 million and $15.4$16.8 million, respectively, primarily related to certain U.S. state and foreign NOL carryforwards, including Brazil and Australia, which may not be realized.$142.8$161.7 million and $133.3$142.8 million at December 31, 20152016 and 2014,2015, respectively. It is not practicable to determine the amount of federal income taxes, if any, that might become due if such earnings are repatriated. We have the ability and intent to leave these foreign earnings permanently reinvested abroad.20112012 and for substantially all foreign jurisdictions for years prior to 2007.2008. We are not currently under examination by anythe United States federal or state tax authorities however,for tax years 2014 and 2015 and by the State of Texas for tax years 2012 through 2015. In addition, we are under examination by various tax authorities in other countries. We fully cooperate with all audits, but defend existing positions vigorously. These audits are in various stages of completion and certain foreign jurisdictions have challenged the amount of taxes due for certain tax periods. We evaluate the potential exposure associated with various filing positions and record a liability for tax contingencies as circumstances warrant. Although we believe all tax positions are reasonable and properly reported in accordance with applicable tax laws and regulations in effect during the periods involved, the final determination of tax audits and any related litigation could be materially different than that which is reflected in historical income tax provisions and tax contingency accruals.NEWPARK RESOURCES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) $ 3,786 $ 2,175 $ 2,753 (95 ) 1,604 (650 ) - 7 72 (575 ) - - (2,697 ) - - $ 419 $ 3,786 $ 2,175 (In thousands) 2016 2015 2014 Balance at January 1 $ 419 $ 3,786 $ 2,175 Additions (reductions) for tax positions of prior years 477 (95 ) 1,604 Additions (reductions) for tax positions of current year — — 7 Reductions for settlements with tax authorities — (575 ) — Reductions for lapse of statute of limitations (231 ) (2,697 ) — Balance at December 31 $ 665 $ 419 $ 3,786 $0.1$0.5 million of unrecognized tax benefits at December 31, 2015,2016, if recognized, would favorably impact the effective tax rate. In 2015, we recognized a $2.2 million benefit to the income tax provision relating to uncertain tax positions for which the applicable statutes of limitation expired.The Company recognizesDuring the year ended December 31, 2015We recognized an insignificant amount of interest and 2014, the Company recognizedpenalties in 2016 and approximately $0.1 million and $0.4 million respectively in interestduring 2015 and penalties. In 2013, there was no interest and penalties recognized. The Company2014, respectively. We had approximately $0.1 million and $0.4$0.1 million accrued for interest and penalties accrued at December 31, 2016 and 2015, and 2014, respectively. 99,204 98,031 95,734 104 540 1,386 69 633 911 99,377 99,204 98,031 (In thousands of shares) 2016 2015 2014 Outstanding, beginning of year 99,377 99,204 98,031 Shares issued for exercise of options 125 104 540 Shares issued for time vested restricted stock (net of forfeitures) 341 69 633 Outstanding, end of year 99,843 99,377 99,204 2014 or 2013.2014 and 2013,2014, we repurchased 234,901, 292,168 215,760 and 222,175215,760 shares, respectively, for an aggregate price of $1.2 million, $2.3 million $2.5 million and $2.6$2.5 million, respectively, representing employee shares surrendered in lieu of taxes under vesting of restrictedemployee stock awards. All of the shares repurchased are held as treasury stock.��NEWPARK RESOURCES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)2014 and 2013,2014, we reissued 375,196, 200,056 155,650 and 67,622155,650 shares of treasury stock pursuant to various stock plans, including our employee stock purchase plan and our 2014 Non-Employee Directors’ Restricted Stock Plan.In April 2013, our share repurchase program that authorizes the Companyus to purchase up to $50.0$100.0 million of itsour outstanding shares of common stock. This authorization was subsequently increased to $100.0 million in February 2014. In September 2015, our Board of Directors expanded the repurchase program to include the repurchase of our convertible senior notes, in addition tostock or outstanding shares of common stock.Convertible Notes due 2017. The repurchase program has no specific term. The CompanyWe may repurchase shares or convertible senior notesConvertible Notes due 2017 in the open market or as otherwise determined by management, subject to market conditions, business opportunities, limiatationscertain limitations under our existing Credit Agreementthe ABL Facility and other factors. Repurchases are expected to be funded from operating cash flows and available cash on-hand. Subject to continued covenant compliance, funds under our existing Credit Agreement could also be available for such repurchases. As part of the share repurchase program, the Company’sour management has been authorized to establish trading plans under Rule 10b5-1 of the Securities Exchange Act of 1934.repurchasesshares repurchased under the program during 2016 and 2015. During the years ended December 31,In 2014, and 2013, we repurchased 4,317,278 shares of the Company’sour common stock under this program totaling 4,317,278 and 562,341 shares, respectively for an average price per share, including commissions, of $11.72 and $11.94, respectively. As of December 31, 2015, there was $42.7 million of authorization remaining under the program.convertible senior notesConvertible Notes due 2017 in the open market for $9.2 million. This repurchase was made under ourthe existing Board authorized repurchase program discussed above. As of February 26,December 31, 2016, we had $33.5 million of authorization remaining under the program. $ (90,828 ) $ 79,009 $ 52,622 82,722 82,999 85,095 $ (1.10 ) $ 0.95 $ 0.62 $ (90,828 ) $ 79,009 $ 52,622 - 5,091 5,005 $ (90,828 ) $ 84,100 $ 57,627 82,722 82,999 85,095 - 1,733 1,767 - 15,682 15,682 82,722 100,414 102,544 $ (1.10 ) $ 0.84 $ 0.56 3,884 788 415 For Year Ended December 31, (In thousands, except per share data) 2016 2015 2014 Numerator Basic - income (loss) from continuing operations $ (40,712 ) $ (90,828 ) $ 79,009 Assumed conversions of Convertible Notes due 2017 — — 5,091 Diluted - adjusted income (loss) from continuing operations $ (40,712 ) $ (90,828 ) $ 84,100 Denominator Basic - weighted average common shares outstanding 83,697 82,722 82,999 Dilutive effect of stock options and restricted stock awards — — 1,733 Dilutive effect of the Convertible Notes due 2017 — — 15,682 Dilutive effect of Convertible Notes due 2021 — — — Diluted - weighted average common shares outstanding 83,697 82,722 100,414 Net income (loss) from continuing operations per common share Basic $ (0.49 ) $ (1.10 ) $ 0.95 Diluted $ (0.49 ) $ (1.10 ) $ 0.84 year ended December 31, 2015, we excluded all potentially dilutive stock options and restrictedfollowing weighted-average potential common shares from the calculations of diluted net income (loss) per common share during the applicable periods because their inclusion would have been anti-dilutive: Year Ended December 31, (In thousands) 2016 2015 2014 Stock options and restricted stock-based awards 7,482 3,884 788 Convertible Notes due 2017 14,295 15,682 — Convertible Notes due 2021 — — — well ascalculated in accordance with the assumedterms of the indenture governing the Convertible Notes due 2021, exceeds the conversion price of $9.33 per share. We have the option to pay cash, issue shares of common stock, or any combination thereof for the aggregate amount due upon conversion of the SeniorConvertible Notes due 2021 as further described in calculatingNote 6 above. If converted, we currently intend to settle the principal amount of the notes in cash and as a result, only the amounts payable in excess of the principal amount of the notes, if any, are assumed to be settled with shares of common stock for purposes of computing diluted earnings per share as the effect was anti-dilutive.net income.2015,2016, non-employee directors received shares of restricted stock totaling 102,218212,961 shares at a weighted average fair value on the date of grant of $9.00$4.32 per share.NEWPARK RESOURCES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)815,933602,972 shares available for grant as of December 31, 2015.The maximumIn May 2016, our stockholders approved an amendment to the 2015 Plan which increased the number of shares of common stock issuableauthorized for issuance under the Plan from 6,000,000 to 7,800,000 shares. Under the 2015 Plan, is 6,000,000. Under the 2015 Plan,as amended, grants of stock options and stock appreciation rights will reduce the number of available shares on a 11.00 to 11.00 basis, while full value awards will reduce the number of available shares on a 1.851.78 to 11.00 basis. At December 31, 2015, 2,975,5252016, 650,951 shares remained available for award under the 2015 Plan.Plan.Plan, as amended. Activity under each of these programs is described below. generally granted with a three year vesting period and a term of ten years. During 2015, 695,6982016, 1,242,856 options were granted with a three year vesting period and a ten year term. Thean exercise price of each stock option granted was equal to the fair market value on the date of grant.NEWPARK RESOURCES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)2015: 3,342,015 $ 7.67 695,698 9.00 (104,339 ) 5.30 (45,541 ) 8.94 3,887,833 $ 7.96 6.20 $ 877,383 3,831,985 $ 7.93 6.16 $ 877,383 2,715,043 $ 7.10 5.06 $ 877,383 Shares Weighted-
Average
Exercise Price Weighted-
Average
Remaining
Contractual
Life (Years) Aggregate
Intrinsic ValueOutstanding at beginning of period 3,887,833 $ 7.96 Granted 1,242,856 4.32 Exercised (125,017 ) 5.80 Expired or canceled (320,833 ) 8.43 Outstanding at end of period 4,684,839 $ 7.02 6.14 $ 7,130,887 Vested or expected to vest at end of period 4,592,882 $ 7.06 6.08 $ 6,878,173 Options exercisable at end of period 2,910,115 $ 7.67 4.40 $ 3,235,311 1.57 % 1.53 % 1.02 % 5.22 5.22 5.22 47.3 % 48.6 % 53.7 % - - - Year Ended December 31, 2016 2015 2014 Risk-free interest rate 1.38 % 1.57 % 1.53 % Expected life of the option in years 5.22 5.22 5.22 Expected volatility 50.5 % 47.3 % 48.6 % Dividend yield — % — % — % $ 9.00 $ 11.20 $ 11.43 $ 3.91 $ 4.97 $ 5.42 Year Ended December 31, 2016 2015 2014 Weighted-average exercise price of the stock on the date of grant $ 4.32 $ 9.00 $ 11.20 Weighted-average grant date fair value on the date of grant $ 1.97 $ 3.91 $ 4.97 the years ended December 31,2016, 2015 2014 and 20132014 reflected an exercise price equal to the market value of the stock on the date of grant.NEWPARK RESOURCES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)$3.2 million and $6.1$3.2 million for the years ended December 31, 2016, 2015 2014 and 2013,2014, while cash from option exercises totaled $0.7 million, $0.6 million and $3.4 million, and $8.3 million, respectively.2015:2016: Rights Outstanding at beginning of period RightsExercised — Expired or cancelled (33,633 ) Outstanding at end of period 69,500 Outstanding at beginning of period107,133Exercised-Expired or cancelled(4,000)Outstanding at end of period103,13369,500 103,1332015,2016, there were no additional grants of cash-settled stock appreciation rights. TheAll remaining outstanding cash-settled stock appreciation rights have a June 2018 expiration date, and if exercised, will ultimately be settled in cash for the difference between the market value of our outstanding shares at the date of exercise, and $7.89. As such, the projected cash settlement is adjusted each period based uponon the ending fair market value of the underlying stock. At December 31, 2015,2016, the fair market value of each cash-settled stock appreciation right was $1.04,$1.71, resulting in a liability of $0.1 million.and 2013 was $2.6$2.3 million, $2.6 million and $3.3$2.6 million, respectively. For the years ended December 31, 2016, 2015 2014 and 2013,2014, we recognized tax benefits resulting from the exercise of stock options totaling $0.1 million, $0.1 million and $1.0 million and $1.9 million,, respectively. & Cash-Settled Performance-Based Restricted Stock UnitsThe Compensation Committee may use various business criteria to set the performance objectives for awards of performance-basedunits. During 2015, 2014 and 2013, performance-based awardsunits were awarded to executive officers. The performance-based restricted stock unitsofficers and will be settled in shares of common stock and will be based on the relative ranking of the Company’sour total shareholder return (“TSR”) as compared to the TSR of the Company’sour designated peer group over a three year period. During 2015, a total of 136,881 performance-based restricted stock units at target were granted with the payout of shares for each executive ranging from 0%-150% of target. The performance period began June 1, 2015 and ends May 31, 2018, with the ending TSR price beingis equal to the average closing price of our shares over the last 30-calendar days ending May 31, 2018. During 2014, a total of 110,497 performance-based restricted stock units at target were granted with the payout of shares for each executive ranging from 0%-150% of target. The performance period began June 1, 2014 and ends May 31, 2017, withas set forth in the ending TSR price being equal to the average closing price of our shares over the 30-calendar days ending May 31, 2017. During 2013, a total of 149,532 performance-based restricted stock units were granted with the payout of shares for each executive ranging from 0%-150% of target. The performance period began May 3, 2013 and ends June 1, 2016, with the ending TSR price being equal to the average closing price of our shares over the 30-calendar days ending June 1, 2016.following table: Year Ended December 31, 2016 2015 2014 Number of performance-based restricted stock units issued, at target 230,790 136,881 110,497 Range of payout of shares for each executive 0% - 150% 0% - 150% 0% - 150% Performance period begin date June 1, 2016 June 1, 2015 June 1, 2014 Performance period end date May 31, 2019 May 31, 2018 May 31, 2017 Estimated fair value at date of grant $ 5.18 $ 10.06 $ 12.55 The following table summarizes activity for outstanding performance-based restricted stock units for the year-ended December 31, 2015: 198,448 $ 12.82 136,881 10.06 - 335,329 $ 11.69 $ 10.06 $ 12.55 $ 13.11 1.02 % 0.81 % 0.52 % $ 8.96 (1) $ 11.28 (2) $ 11.33 (3) 38.4 % 44.5 % 53.6 % - - - Year Ended December 31, 2016 2015 2014 Risk-free interest rate 0.95 % 1.02 % 0.81 % $ 4.69 $ 8.96 $ 11.28 Expected volatility 46.9 % 38.4 % 44.5 % Dividend yield — % — % — % (1) Average closing price of our shares over the 30-calendar days ending May 19, 2015.(2)2014.(3)Average closing price of our shares over the 30-calendar days ending June 3, 2013.During 2015, 2014 and 2013, $1.1 million, $0.5 million and $0.4 million inNonvested Performance-Based Restricted Stock Units Shares Weighted-Average
Grant Date
Fair ValueOutstanding at beginning of period 335,329 $ 11.69 Granted 230,790 5.18 Vested (58,072 ) 13.11 Forfeited (60,863 ) 12.51 Outstanding at the end of period 447,184 $ 8.06 was recognized for performance-based restricted stock units was $1.0 million, $1.1 million and $0.5 million for the years ended December 31, 2016, 2015 and 2014 respectively.NEWPARK RESOURCES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)for the year-ended December 31, 2015. 1,722,899 $ 10.58 142,218 9.10 (932,161 ) 9.95 (51,611 ) 10.60 881,345 $ 11.00 158,878 $ 10.22 Nonvested Restricted Stock Awards (Time-Vesting) Shares Weighted-Average
Grant Date
Fair ValueNonvested at January 1, 2016 881,345 $ 11.00 1,074,937 8.95 262,961 4.50 (80,257 ) 9.20 (449,342 ) 10.50 (20,015 ) 9.12 (99,429 ) 11.30 1,133,543 $ 9.11 Nonvested at December 31, 2016 595,535 $ 8.45 Nonvested Restricted Stock Units (Time-Vesting) Shares Weighted-Average
Grant Date
Fair ValueNonvested at January 1, 2016 1,133,543 $ 9.11 Granted 1,534,994 4.36 Vested (332,043 ) 9.30 Forfeited (153,465 ) 8.04 Nonvested at December 31, 2016 2,183,029 $ 5.82 $8.6 million and $6.7$8.6 million for the years ended December 31, 2016, 2015 2014 and 20132014, respectively. Total unrecognized compensation cost at December 31, 20152016 related to restricted stock awards and restricted stock units is approximately $14.0$10.9 million which is expected to be recognized over the next 1.91.8 years. During the years ended December 31, 2016, 2015 2014 and 2013,2014, the total fair value of shares vested was $3.9 million, $8.1 million and $9.0 million, respectively.$9.5 million, respectively.For the years ended December 31, 2015, 2014, and 2013, we recognized tax benefits resulting from the vesting of restricted sharestock awards and units totaling $1.5 million, $2.0 million and $2.8 million, and $3.0 million, respectively.$3.4 million in 2015, 2014, and 2013, respectively. In connection with the additional cost reduction programs implemented in response to the continuingcontinued decline in activity in early 2016, we have initiated additional cost reduction programs which include the temporary elimination oftemporarily eliminated our 401(k) matching contribution beginning in March 2016.Intersegment revenues are generally recorded at cost for items which are included in inventory of the purchasing segment, and at standard markups for items which are included in cost of revenues of the purchasing segment. All intersegmentintercompany revenues and related profits have been eliminated.NEWPARK RESOURCES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)offersprovides drilling fluids products and technical services to customers in the North America, EMEA, Latin America, and Asia Pacific regions. We offer customized solutions includingfor highly technical drilling projects involving complex subsurface conditions, such as horizontal, directional, geologically deep or deep water drilling. These projects require increased monitoring and critical engineering support of the fluids system during the drilling process. We provide drilling fluids products and technical services to markets in North America, EMEA, Latin America, and the Asia Pacific regions. We grind barite and other industrial minerals at four facilities, including locations in Texas, Louisiana and Tennessee. We use the resulting products in our drilling fluids business, and also sell them to third party users, including other drilling fluids companies. We also sell a variety of other minerals, principally to third party industrial (non-oil and gas) markets.We manufacture Our Mats and Integrated Services segment manufactures our DURA-BASE® Advanced Composite Mats for use in our rental operations as well as for third party sales. Our mats provide environmental protection and ensure all-weather access to sites with unstable soil conditions. We sell composite mats direct to customers in areas around the world where we do not maintain an infrastructure for our mat rental activities. In addition, we provide mat rentals to E&P customers in the Northeast U.S., onshore U.S. Gulf Coast,E&P, electrical transmission & distribution, pipeline, solar, petrochemical and Rocky Mountain Regions, and to non-E&P customers inconstruction industries across the U.S., Canada and the United Kingdom. We also offer location construction and related well site services to E&P customers, primarily in the U.S. Gulf Coast Region.Historically, our marketing efforts for the sale ofregion. In addition, we sell composite mats remained focused in principalto customers outside of the U.S. and to domestic customers outside of the oil and gas industry markets outside the U.S., as well as markets outside the E&P sector in the U.S. and Europe. We believe these mats have worldwide applications outside our traditional oilfield market, primarily in infrastructure construction, maintenance and upgrades of pipelines and electric utility transmission lines, and as temporary roads for movement of oversized or unusually heavy loads. In late 2013, we announced plans to significantly expand our manufacturing facility, in order to support our efforts to expand our markets globally. This project was completed in 2015, which nearly doubled our manufacturing capacity and significantly expanded our research and development capabilities. $ 581,136 $ 965,049 $ 926,392 95,729 153,367 115,964 $ 676,865 $ 1,118,416 $ 1,042,356 $ 22,108 $ 22,934 $ 26,679 18,869 15,507 10,501 2,940 2,734 2,584 $ 43,917 $ 41,175 $ 39,764 $ (86,770 ) $ 95,600 $ 72,604 24,949 70,526 49,394 (37,278 ) (35,530 ) (27,553 ) $ (99,099 ) $ 130,596 $ 94,445 $ 549,827 $ 778,148 $ 733,340 172,415 175,318 112,619 - - 79,020 126,651 54,206 29,939 $ 848,893 $ 1,007,672 $ 954,918 $ 40,533 $ 36,626 $ 39,316 27,456 64,101 26,455 1,415 5,215 464 $ 69,404 $ 105,942 $ 66,235 Year Ended December 31, (In thousands) 2016 2015 2014 Revenues Fluids systems $ 395,461 $ 581,136 $ 965,049 Mats and integrated services 76,035 95,729 153,367 Total revenues $ 471,496 $ 676,865 $ 1,118,416 Depreciation and amortization Fluids systems $ 20,746 $ 22,108 $ 22,934 Mats and integrated Services 14,227 18,869 15,507 Corporate office 2,982 2,940 2,734 Total depreciation and amortization $ 37,955 $ 43,917 $ 41,175 Operating income (loss) Fluids systems $ (43,631 ) $ (86,770 ) $ 95,600 Mats and integrated services 14,741 24,949 70,526 Corporate office (28,323 ) (37,278 ) (35,530 ) Operating income (loss) $ (57,213 ) $ (99,099 ) $ 130,596 Segment Assets Fluids Systems $ 522,488 $ 549,827 $ 778,148 Mats and Integrated Services 164,515 172,415 175,318 Corporate 111,180 126,651 54,206 Total Assets $ 798,183 $ 848,893 $ 1,007,672 Capital Expenditures Fluids Systems $ 32,310 $ 40,533 $ 36,626 Mats and Integrated Services 4,637 27,456 64,101 Corporate 1,493 1,415 5,215 Total Capital Expenditures $ 38,440 $ 69,404 $ 105,942 initiatedimplemented cost reduction programs in the first quarter of 2015 including workforce reductions, reduced discretionary spending, and temporary salary freezes for substantially all employees, including executive officers, and have continued these efforts throughout 2015.officers. In September 2015, we also initiatedimplemented a voluntary early retirement program with certain eligible employees in the United StatesStates. As a result of the further declines in activity in the first half of 2016, we implemented further cost reduction actions including additional workforce reductions and beginning in March 2016, a temporary salary reduction for retirement dates ranging froma significant number of North American employees, including executive officers, suspension of the fourth quarterCompany’s matching contribution to the U.S. defined contribution plan as well as a reduction in cash compensation paid to our Board of 2015 through the third quarter of 2016. Directors in order to further align our cost structure to activity levels.have reduced our North American employee base by 626 (approximately 48%) from the first quarter 2015 through the third quarter of 2016, including reductions of 436 (approximately 34%)employees in 2015 and 190 employees in addition to eliminating substantially all contract positions.the first nine months of 2016. As a result of these termination programs, our 2015 operating results include $8.2 million ofwe recognized charges associated withfor employee termination costs with $5.7 million reportedas shown in cost of revenues and $2.5 million reported in selling, general and administrative expenses. The employee termination costs include $7.2 million in Fluids Systems, $0.7 million in Mats and Integrated Services and $0.3 million in our corporate office. the table below: Year Ended December 31, (In thousands) 2016 2015 Cost of revenues $ 3,647 $ 5,664 Selling, general and administrative expenses 925 2,499 Total employee termination costs $ 4,572 $ 8,163 Fluids systems $ 4,125 $ 7,218 Mats and integrated services 285 717 Corporate office 162 228 Total employee termination costs $ 4,572 $ 8,163 arewere $0.3 million and $3.3 million, respectively.are expected to be substantially paid in the first half2015 operating losses include net charges of 2016. Additional employee termination costs of $0.7$14.8 million associated with the voluntary retirement program will be recognized in 2016.During the fourth quarter of 2015, a total ofand $80.5 million, of charges were included in operating loss forrespectively, resulting from the reduction in value of certain assets, the wind-down of our operations in Uruguay and the pending resolution of certain wage and hour litigation claims. The Fluids Systems segment operating results includeincluded $15.5 million and $75.5 million of these charges in 2016 and 2015, respectively. The remaining $0.7 million benefit and $5.0 million charge was included in Corporate Office expenses in 2016 and 2015, respectively, related to the resolution of certain wage and hour litigation claims.inventory. inventory, resulting from lower of cost or market adjustments.addition, corporate office expenses include2016, a $5.0total of $6.7 million chargeof these charges are reported in impairments and other charges with the remaining $8.1 million reported in cost of revenues including the $4.1 million of charges for the pending resolutionwrite-down of certain wageinventory and hour litigation claims and related$4.0 million of the Uruguay exit costs. In our 2015, consolidated statement of operations, a total of $78.3 million of these charges are reported in impairments and other charges with the remaining $2.2 million chargeof charges for the write-down of inventory being reported in cost of revenues.The Consolidated Statements of Cash Flows included in this Item 8 of these Financial Statements and Supplementary Data include $0.9 million and $4.4 million in depreciation and amortization expense and capital expenditures of $1.0 million and $1.7 million for 2014 and 2013, respectively, related to the Environmental Services business sold in 2014 that are classified as discontinued operations. $ 384,147 $ 748,845 $ 717,263 52,851 79,516 47,559 174,524 177,244 141,535 47,240 85,244 99,587 18,103 27,567 36,412 $ 676,865 $ 1,118,416 $ 1,042,356 $ 275,109 $ 294,762 $ 247,947 552 10,044 10,862 50,759 55,560 44,262 4,543 6,635 9,852 9,731 25,991 27,241 $ 340,694 $ 392,992 $ 340,164 No Year Ended December 31, (In thousands) 2016 2015 2014 Revenue United States $ 214,026 $ 384,147 $ 748,845 Canada 34,176 52,851 79,516 Algeria 80,936 65,272 58,417 All Other EMEA 96,654 109,252 118,827 Latin America 41,035 47,240 85,244 Asia Pacific 4,669 18,103 27,567 Total Revenue $ 471,496 $ 676,865 $ 1,118,416 Long-Lived Assets United States $ 274,746 $ 275,109 $ 294,762 Canada 3,922 552 10,044 EMEA 48,047 50,759 55,560 Latin America 4,842 4,543 6,635 Asia Pacific 1,939 9,731 25,991 Total Long-Lived Assets $ 333,496 $ 340,694 $ 392,992 revenues for the years ended December 31, 2015, 2014 or 2013.revenues.2014, and 2013,2014, included accruals for capital expenditures of $2.0 million, $3.9 million, and $1.2 million, and $1.5 million, respectively.and 2014 were $45.8$31.2 million and $52.8$45.8 million, respectively. The balance at December 31, 20152016 and December 31, 20142015 included $11.9 million and $15.1 million, and $25.9 millionrespectively, for employee incentives and other compensation related expenses, respectively.expenses. Year Ended December 31, (In thousands) 2016 2015 Goodwill and other intangible asset impairments $ 3,104 $ 70,720 Property, plant and equipment impairments 4,286 2,625 Inventory write-downs 4,075 2,163 Write-off of debt issuance costs on termination of Credit Agreement 1,058 — Impairments and other non-cash charges in the Consolidated Statements of Cash Flows $ 12,523 $ 75,508 (In thousands) 2014 Revenues $ 11,744 Income from discontinued operations before income taxes 1,770 Income from discontinued operations, net of tax 1,152 Gain from disposal of discontinued operations before income taxes 33,974 Gain from disposal of discontinued operations, net of tax 22,117 NEWPARK RESOURCES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)seekssought damages and penalties for the Company’sour alleged failure to:to properly classify itsour field service employees as “non-exempt” under the FLSA;FLSA and pay them on an hourly basis (including overtime). The plaintiff seeks recovery on his own behalf, and seeks certification of a class of similarly situated employees. The Court conditionally certified a class of plaintiffs as those working as fluid service technicians for Newpark Drilling Fluids for the prior three years. Notification was given to 658 current and former fluid service technician employees of Newpark regarding this litigation and those individuals were given the opportunity to “opt-in” to the Davida litigation. The opt-in period closed in early May of 2015 and a total of 91 individuals joined the Davida litigation. Counsel for the plaintiffs moved to add state law class action claims for current and former fluid service technicians that worked for Newpark Drilling Fluids in New York, North Dakota, Ohio and Pennsylvania. The Court granted the motion, but gave Newpark the right to file a motion to dismiss these state law claims, and that motion is pending. Among other reasons, we sought dismissal of those state law claims on the basis that an insufficient number of employees are located in those states to support a class action. We expect that the effect of the additional state law claims (excluding New York and Ohio claims) would be to include in the litigation approximately 48 current and former fluid service technicians who worked in Pennsylvania, and approximately 41 current and former fluid service technicians who worked in North Dakota. Discovery is in process with the trial currently being scheduled for September 2016.arewere entitled to assert claims for alleged violations of the FLSA (similar to the claims asserted in theDavida matter). Five additional plaintiffs joined this litigation after it was filed. In March of 2015, the Court denied the plaintiffs’ motion for conditional class certification. Counsel for the plaintiffs did not appeal that ruling and have nowsubsequently filed individual cases for each of the original opt-in plaintiffs plus two new plaintiffs, leaving a total of eight independent contractor cases pending. Preliminary discovery has occurred in these cases.theChristiansenChristiansen-related cases filed two additional individual FLSA cases on behalf of former fluid service technician employees. These cases are similar in nature to theDavida case discussed above.of 2016, the parties reached anexecuted a settlement agreement in April 2016 to settleresolve all of the pending matters, subject to a number of conditions, including approval by the Court in theDavida case, and the dismissal of the other FLSA cases (Christiansen-related lawsuits and individual FLSA cases). SubjectAs a result of the then ongoing settlement negotiations, we recognized a $5.0 million charge in the fourth quarter of 2015 related to the resolution of these conditions,wage and hour litigation claims. The settlement agreement was approved by the Davida Court on August 19, 2016. Approximately 569 current and former fluid service technician employees that are eligible for the settlement will bewere notified of the pending resolution beginning on August 26, 2016 and given an opportunity to participate in the settlement. The amount paid to any eligible individual will varyvaried based on a formula that takes into account the number of workweeks and salary for the individual during the time period covered by the settlement (which can vary based upon several factors).settlement. Any eligible individual that electselected to participate in the settlement will releasereleased all wage and hour claims against us.Company.settlement represented approximately 67% of the individuals receiving notice. Individuals that did not participate in the settlement may retain the right to file an individual lawsuit against us, subject to any defenses we may assert. As a result of the settlement negotiations,agreement, we recognizedpaid $4.5 million into a $5.0 million chargesettlement fund in the fourth quarter of 2015 related to the pending resolution of these wage and hour litigation claims, which is included in impairments and other charges. We expect to fund the settlement amount in the firstsecond half of 2016, subject to the conditions described above.2016. The settlement fund will bewas administered by a third party who will makemade payments to eligible individuals that electelected to participate in accordance with a formula incorporated into the pending settlement agreement. In addition, under the terms of the pending settlement agreement, if settlement funds remainthat remained after all payments arewere made to eligible individuals that electelected to participate in the settlement such excess amount will bewere shared by the participating individuals and Newpark Drilling Fluids. Theus. In the fourth quarter of 2016, we recognized a $0.7 million gain associated with the change in final settlement amount of excess funds, if any, is not currently determinable.these wage and hour litigation claims.NEWPARK RESOURCES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)$4$4.0 million was scheduled for release to Newpark at each of the nine-month and 18-month anniversary of the closing. In December 2014, we received a letter from counsel for Ecoserv asserting that we had breached certain representations and warranties contained in the sale agreement;agreement including failing to disclose service work performed on injection wells and increased barge rental costs. The letter indicated that Ecoserv expected the costs associated with these claims to exceed the escrow amount. Following a further exchange of letters, in July of 2015, we filed a declaratory judgment action against Ecoserv in state court in Harris County, Texas, seeking release of the escrow funds. Thereafter, Ecoserv filed a counterclaim seeking recovery of the escrow funds based on the alleged breach of representations and warranties. Ecoserv also alleges that we committed fraud in connection with the sale transaction. We believe there is no basis in the agreement or on the facts to support the claims asserted by Ecoserv and intend to vigorously defend our position while pursuing release of the entire $8$8.0 million in escrow. Discovery has commenced betweenThe litigation remains in the parties.including transportation equipment, under operating leases with remaining terms ranging from one to eleventen years with various renewal options. Substantially all leases require payment of taxes, insurance and maintenance costs in addition to rental payments. Total rental expenses for all operating leases were approximately $21.0 million, $22.6 million and $25.5 million in 2016, 2015 and $24.5 million in 2015, 2014, and 2013, respectively. $ 8,648 6,324 $ 9,310 4,794 6,128 3,976 4,724 3,636 3,805 2021 3,342 12,688 9,780 $ 40,066 $ 37,089 $3.3$3.0 million and $3.5$3.3 million at December 31, 20152016 and 2014,2015, respectively. We also had $0.4 million and $0.4 million in guarantee obligations in connection with facility closure bonds and other performance bonds issued by insurance companies outstanding as of December 31, 2016 and 2015, and 2014, respectively.$1.0$0.8 million and $1.8$1.0 million for unpaid claims incurred, based on historical experience at December 31, 20152016 and 2014,2015, respectively. Substantially all of these estimated claims are expected to be paid within six months of their occurrence.20152016 and 2014,2015, we had accrued liabilities of $2.5$1.9 million and $2.4$2.5 million, respectively, for the uninsured portion of claims.20152016 and 2014,2015, we had accrued asset retirement obligations of $1.0 million and $0.8 million, and $0.6 million, respectively.1516 — Supplemental Selected Quarterly Financial Data (Unaudited) $ 208,464 $ 163,644 $ 154,170 $ 150,587 6,128 (1,682 ) (9,263 ) (94,282 ) 993 (4,254 ) (4,471 ) (83,096 ) 993 (4,254 ) (4,471 ) (83,096 ) 0.01 (0.05 ) (0.05 ) (1.00 ) 0.01 (0.05 ) (0.05 ) (1.00 ) 0.01 (0.05 ) (0.05 ) (1.00 ) 0.01 (0.05 ) (0.05 ) (1.00 ) $ 242,824 $ 272,466 $ 296,964 $ 306,162 20,757 31,816 39,432 38,591 11,742 20,329 23,492 23,446 35,011 20,329 23,492 23,446 0.14 0.24 0.29 0.29 0.41 0.24 0.29 0.29 0.13 0.21 0.25 0.25 0.36 0.21 0.25 0.25 During(In thousands, except per share amounts) First
Quarter Second
Quarter Third
Quarter Fourth
QuarterFiscal Year 2016 Revenues $ 114,544 $ 115,315 $ 104,554 $ 137,083 Operating loss (18,825 ) (15,135 ) (15,055 ) (8,198 ) Net loss (13,300 ) (13,904 ) (13,451 ) (57 ) Net loss per common share Basic $ (0.16 ) $ (0.17 ) $ (0.16 ) $ — Diluted $ (0.16 ) $ (0.17 ) $ (0.16 ) $ — Fiscal Year 2015 Revenues $ 208,464 $ 163,644 $ 154,170 $ 150,587 Operating income (loss) 6,128 (1,682 ) (9,263 ) (94,282 ) Net income (loss) 993 (4,254 ) (4,471 ) (83,096 ) Net income (loss) per common share Basic $ 0.01 $ (0.05 ) $ (0.05 ) $ (1.00 ) Diluted $ 0.01 $ (0.05 ) $ (0.05 ) $ (1.00 ) fourthcarrying value of drilling fluids inventory in our Asia Pacific region. Fourth quarter 2016 and third quarter 2016 operating loss includes charges of $2.0 million and $2.5 million, respectively, associated primarily with asset redeployment costs resulting from the exit of our Fluids Systems operations in Uruguay. Second quarter 2016 operating loss includes a total of $6.9 million of impairments and other charges related to our Asia Pacific region, including a $3.8 million non-cash impairment to write-down property, plant and equipment to its estimated fair value and a $3.1 million impairment of customer related intangible assets. were included in operating loss for the reduction in value of certain assets and the pending resolution of certainthe wage and hour litigation claims. The Fluids Systems segment operating resultsThese charges include $75.5 million of these charges including a $70.7 million non-cash impairment of goodwill, a $2.6 million non-cash impairment of assets following our decision to exit a facility, and a $2.2 million charge to reduce the carrying value of diesel-based drilling fluid inventory. In addition, corporate office expenses includeinventory, and a $5.0 million charge for the pending resolution of certain wage and hour litigation claimsclaims.related costs. In our 2015 consolidated statement of operations, a total of $78.3 million of these charges are reported in impairmentsDisagreements with Accountants on Accounting and other charges with the $2.2 million charge for the write-down of inventory being reported in cost of revenues.Financial DisclosureITEM 9.Changes in and Disagreements with Accountants on Accounting and Financial DisclosureNone.ITEM 9A.Controls and Procedures2015.20152016 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.20152016 as required by the Securities and Exchange Act of 1934 Rule 13a-15(c). In making its assessment, we have utilized the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in a report entitled “Internal Control — Integrated Framework (2013).” We concluded that based on our evaluation, our internal control over financial reporting was effective as of December 31, 2015.20152016 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report which is included herein. /s/ /s/2015,2016, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit.2015,2016, based on the criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.2015,2016, of the Company and our report dated February 26, 201624, 2017 expressed an unqualified opinion on those financial statements.Houston, TexasFebruary 26, 2016ITEM 9B.Other InformationNone.ITEM 10.Directors, Executive Officers and Corporate Governance20162017 Annual Meeting of Stockholders.20162017 Annual Meeting of Stockholders.that applies to all of our directorsfor Senior Officers and senior officers,Directors, and a Corporate Compliance andCode of Business Ethics Manualand Conduct (“Ethics Manual”) that applies to all officers and employees. The Code of Ethics and Ethics Manual are publicly available in the investor relations area of our website at www.newpark.com. This Code of Ethics is incorporated in this report by reference. Copies of our Code of Ethics may also be requested in print by writing to Newpark Resources, Inc., 9320 Lakeside Blvd., Suite 100, The Woodlands, Texas, 77381.ITEM 11.Executive Compensation20162017 Annual Meeting of Stockholders.ITEM 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters20162017 Annual Meeting of Stockholders.ITEM 13.Certain Relationships and Related Transactions, and Director Independence20162017 Annual Meeting of Stockholders.ITEM 14.Principal Accounting Fees and Services20162017 Annual Meeting of Stockholders.ITEM 15.Exhibits and Financial Statement Schedules 39 as of December 31, 2015 and 201440 for the Years Ended December 31, 2015, 2014 and 201341for the Years Ended December 31, 2015, 2014 and 201342 for the Years Ended December 31, 2015, 2014 and 201343 for the Years Ended December 31, 2015, 2014 and 201344452.Financial Statement Schedules3.ExhibitsThe exhibits listed are filed as part of, or incorporated by reference into, this Annual Report on Form 10-K. 3.1 /s/ Paul L. Howes Paul L. Howes President and Chief Executive Officer Signatures Title Date /s/ Paul L. Howes President, Chief Executive Officer and Director February 24, 2017 Paul L. Howes (Principal Executive Officer) /s/ Gregg S. Piontek Vice President and Chief Financial Officer February 24, 2017 Gregg S. Piontek (Principal Financial Officer) /s/ Douglas L. White Corporate Controller and Chief Accounting Officer February 24, 2017 Douglas L. White (Principal Accounting Officer) /s/ David C. Anderson Chairman of the Board February 24, 2017 David C. Anderson /s/ Anthony J. Best Director, Member of the Audit Committee February 24, 2017 Anthony J. Best /s/ G. Stephen Finley Director, Member of the Audit Committee February 24, 2017 G. Stephen Finley /s/ Roderick A. Larson Director, Member of the Audit Committee February 24, 2017 Roderick A. Larson /s/ James W. McFarland Director, Member of the Audit Committee February 24, 2017 James W. McFarland /s/ Gary L. Warren Director, Member of the Audit Committee February 24, 2017 Gary L. Warren 3.1 Restated Certificate of Incorporation of Newpark Resources, Inc., incorporated by reference to Exhibit 3.1 to the Company’s Form 10-K405 for the year ended December 31, 1998 filed on March 31, 1999 (SEC File No. 001-02960). 3.2 3.23.3 3.33.4 3.43.5 3.53.6 3.63.7 4.1 4.14.2 4.24.3 4.34.4 4.44.5 *10.1Amended and Restated Non-Employee Directors’ Restricted Stock Plan,Wells Fargo Bank, National Association, as trustee, incorporated by reference to Exhibit 10.94.1 to the Company’sCompany's Current Report on Form 10-K8-K filed on March 10, 2009December 5, 2016 (SEC File No. 001-02960).4.6 *10.2Non-Employee Director Restricted Stock Agreement under the Newpark Resources, Inc. Amended and Restated Non-Employee Directors’ Restricted Stock Plan,4.00% Convertible Senior Note due 2021, incorporated by reference to Exhibit 10.10 to4.2 of the Company’sCompany's Current Report on Form 10-K8-K filed on March 10, 2009December 5, 2016 (SEC File No. 001-02960).*10.1 *10.310.2 10.4*10.3 10.5Form of Indemnification Agreement, incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on June 13, 2006 (SEC File No. 001-02960).*10.6*10.4 *10.7*10.5 *10.810.6 10.9*10.7 *10.10First Amendment to the Newpark Resources, Inc. Amended and Restated Non-Employee Directors’ Restricted Stock Plan, incorporated by reference to Exhibit 10.25 to the Company’s Annual Report on Form 10-K filed on March 10, 2009 (SEC File No. 001-02960).*10.11* 10.1210.8*10.9 *10.13*10.10 *10.14*10.11 *10.15*10.12 *10.16Extension Letter Amendment to Amended and Restated Employment Agreement between Newpark Resources, Inc. and Paul L. Howes dated November 30, 2009, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 7, 2009 (SEC File No. 001-02960).*10.17Extension Letter Amendment to Employment Agreement between Newpark Resources, Inc. and Bruce C. Smith dated November 30, 2009, incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on December 7, 2009 (SEC File No. 001-02960).*10.18Extension Letter Amendment to Employment Agreement between Newpark Resources, Inc. and Mark J. Airola dated November 30, 2009, incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on December 7, 2009 (SEC File No. 001-02960).*10.19*10.13 *10.20Change in Control Agreement dated as of October 15, 2010, by and between Newpark Resources, Inc. and Jeffery L. Juergens, incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on October 18, 2010 (SEC File No. 001-02960).*10.21†*10.14 †*10.22*10.15 *10.23*10.16 *10.24*10.17 *10.25*10.18 *10.26*10.19 *10.27*10.20 *10.28*10.21 *10.2910.22 10.30*10.23 *10.31*10.24 *10.32*10.25 *10.33Second Amendment to the Newpark Resources, Inc. Amended and Restated Non-Employee Directors’ Restricted Stock Plan, incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q filed on July 27, 2012 (SEC File No. 001-02960).*10.34*10.26 *10.3510.27 10.36*10.28 *10.37* 10.3810.2910.30 10.3910.31 10.40*10.32 *10.41*10.33 *10.42*10.34 *10.43*10.35 *10.44*10.36 *10.45*10.37 *10.46*10.38 *10.47*10.39 *10.48*10.40 *10.4910.41 10.50*10.42 *10.51*10.43 *10.52*10.44 *10.53*10.45 *10.54*10.46 *10.55*10.47 Employment Agreement, dated as of April 22, 2016, by and between Newpark Resources, Inc. and Matthew S. Lanigan, incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q filed on July 29, 2016 (SEC File No. 001-02960). *10.48 Change in Control Agreement dated as of April 22, 2016 by and between Newpark Resources, Inc. and Matthew S. Lanigan, incorporated by reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q filed on July 29, 2016 (SEC File No. 001-02960). *10.49 Executive Separation and General Release Agreement between Newpark Resources, Inc. and Jeffery L. Juergens, dated May 10, 2016, incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on May 12, 2016 (SEC File No. 001-02960). 10.50 ABL Facility Agreement dated May 12, 2016 by and among Newpark Resources, Inc., Newpark Drilling Fluids LLC, Newpark Mats & Integrated Services LLC, Excalibar Minerals LLC and Dura-Base Nevada, Inc., as borrowers, Bank of America, N.A., as Administrative Agent, Swing Line Lender and an L/C Issuer, and the other Lenders party thereto, incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on May 13, 2016 (SEC File No. 001-02960). *10.51 Amendment No. 1 to Newpark Resources, Inc. 2015 Employee Equity Incentive Plan, incorporated by reference to Exhibit 4.8 to the Company's Registration Statement on Form S-8 filed on May 19, 2016 (333-211459). 10.52 Purchase Agreement, dated November 29, 2016, by and between Newpark Resources, Inc. and Credit Suisse Securities (USA) LLC, as representative of the several initial purchasers named therein, incorporated by reference to Exhibit 1.1 to the Company's Current Report on Form 8-K filed on December 5, 2016 (SEC File No. 001-02960). *10.53 Letter Agreement dated as of December 13, 2016 between Newpark Resources, Inc. and Paul L. Howes, incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on December 15, 2016 (SEC File No. 001-02960). *10.54 Letter Agreement dated as of December 13, 2016 between Newpark Resources, Inc. and Gregg S. Piontek, incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed on December 15, 2016 (SEC File No. 001-02960). *10.55 Letter Agreement dated as of December 13, 2016 between Newpark Resources, Inc. and Bruce C. Smith, incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K filed on December 15, 2016 (SEC File No. 001-02960). *10.56 Letter Agreement dated as of December 13, 2016 between Newpark Resources, Inc. and Mark J. Airola, incorporated by reference to Exhibit 10.4 to the Company's Current Report on Form 8-K filed on December 15, 2016 (SEC File No. 001-02960). †10.57 First Amendment to Credit Agreement dated February 21, 2017 by and among Newpark Resources, Inc., Newpark Drilling Fluids LLC, Newpark Mats and Integrated Services LLC, Excalibar Minerals LLC and Dura-Base Nevada, Inc., as borrowers, Bank of America, N.A., as Administrative Agent, Swing Line Lender and a L/C Issuer, and the other Lenders party thereto. †21.1 †23.1 †23.1†31.1 †31.1†31.2 †31.2†32.1 †32.1†32.2 †32.2†95.1 †95.1†101.INS †101.INS†101.SCH †101.SCH†101.CAL †101.CAL†101.LAB †101.LAB†101.PRE †101.PRE†101.DEF †101.DEF_______SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.NEWPARK RESOURCES, INC.By: /s/ Paul L. Howes Paul L. Howes President and Chief Executive OfficerDated: February 26, 2016Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant in the capacities and on the dates indicated.SignaturesTitleDate/s/ Paul L. HowesPresident, Chief Executive Officer and DirectorFebruary 26, 2016Paul L. Howes(Principal Executive Officer)/s/ Gregg S. PiontekVice President and Chief Financial OfficerFebruary 26, 2016Gregg S. Piontek(Principal Financial Officer)/s/ Douglas L. WhiteCorporate Controller and Chief Accounting OfficerFebruary 26, 2016Douglas L. White(Principal Accounting Officer)/s/ David C. AndersonChairman of the BoardFebruary 26, 2016David C. Anderson/s/ Anthony J. BestDirector, Member of the Audit CommitteeFebruary 26, 2016Anthony J. Best/s/ G. Stephen FinleyDirector, Member of the Audit CommitteeFebruary 26, 2016G. Stephen Finley/s/ Roderick A. LarsonDirector, Member of the Audit CommitteeFebruary 26, 2016Roderick A. Larson/s/ James W. McFarlandDirector, Member of the Audit CommitteeFebruary 26, 2016James W. McFarland/s/ Gary L. WarrenDirector, Member of the Audit CommitteeFebruary 26, 2016Gary L. Warren
74NEWPARK RESOURCES, INCEXHIBIT INDEXThe exhibits listed are filed as part of, or incorporated by reference into, this Annual Report on Form 10-K.3.1Restated Certificate of Incorporation of Newpark Resources, Inc., incorporated by reference to Exhibit 3.1 to the Company’s Form 10-K405 for the year ended December 31, 1998 filed on March 31, 1999 (SEC File No. 001-02960).3.2Certificate of Designation of Series A Cumulative Perpetual Preferred Stock of Newpark Resources, Inc. incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on April 27, 1999 (SEC File No. 001-02960).3.3Certificate of Designation of Series B Convertible Preferred Stock of Newpark Resources, Inc., incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on June 7, 2000 (SEC File No. 001-02960).3.4Certificate of Rights and Preferences of Series C Convertible Preferred Stock of Newpark Resources, Inc., incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on January 4, 2001 (SEC File No. 001-02960).3.5Certificate of Amendment to the Restated Certificate of Incorporation of Newpark Resources, Inc., incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on November 4, 2009 (SEC File No. 001-02960).3.6Amended and Restated Bylaws, incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed March 13, 2007 (SEC File No. 001-02960).4.1Specimen form of common stock certificate of Newpark Resources, Inc., incorporated by reference to the exhibit filed with the Company’s Registration Statement on Form S-1 (SEC File No. 33-40716).4.2Indenture, dated October 4, 2010, between Newpark Resources, Inc. and Wells Fargo Bank, National Association, as trustee, incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on October 4, 2010 (SEC File No. 001-02960).4.3First Supplemental Indenture, dated October 4, 2010, between Newpark Resources, Inc. and Wells Fargo Bank, National Association, as trustee, incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on October 4, 2010 (SEC File No. 001-2960).4.4Form of 4.00% Convertible Senior Note due 2017, incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed on October 4, 2010 (SEC File No. 001-2960).*10.1Newpark Resources, Inc. Amended and Restated Non-Employee Directors’ Restricted Stock Plan, incorporated by reference to Exhibit 10.9 to the Company’s Form 10-K filed on March 10, 2009 (SEC File No. 001-02960).*10.2Form of Non-Employee Director Restricted Stock Agreement under the Newpark Resources, Inc. Amended and Restated Non-Employee Directors’ Restricted Stock Plan, incorporated by reference to Exhibit 10.10 to the Company’s Form 10-K filed on March 10, 2009 (SEC File No. 001-02960).*10.3Amended and Restated Employment Agreement, dated as of December 31, 2008, between the registrant and Paul L. Howes, incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on May 1, 2009 (SEC File No. 001-02960).10.4Indemnification Agreement, dated June 7, 2006, between the registrant and Paul L. Howes, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 13, 2006 (SEC File No. 001-02960).10.5Form of Indemnification Agreement, incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on June 13, 2006 (SEC File No. 001-02960).*10.6Employment Agreement, dated as of September 18, 2006, by and between Newpark Resources, Inc. and Mark J. Airola, incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on September 20, 2006 (SEC File No. 001-02960).*10.7Form of Non-Qualified Stock Option Agreement under the Newpark Resources, Inc. 2006 Equity Incentive Plan, incorporated by reference to Exhibit 4.4 to the Company’s Registration Statement on Form S-8 filed on March 26, 2007 (SEC File No. 333-0141577).*10.8Employment Agreement between Newpark Resources, Inc. and Bruce Smith dated April 20, 2007, incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2007 filed on May 8, 2007 (SEC File No. 001-02960).10.9Amendment to the Indemnification Agreement between Newpark Resources, Inc. and Paul L. Howes dated September 11, 2007, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on September 14, 2007 (SEC File No. 001-02960).*10.10First Amendment to the Newpark Resources, Inc. Amended and Restated Non-Employee Directors’ Restricted Stock Plan, incorporated by reference to Exhibit 10.25 to the Company’s Annual Report on Form 10-K filed on March 10, 2009 (SEC File No. 001-02960).*10.11Newpark Resources, Inc., 2008 Employee Stock Purchase Plan, incorporated by reference to Exhibit 4.1 the Company’s Registration Statement on Form S-8 filed on December 9, 2008 (SEC File No. 333-156010).*10.12Form of Change of Control Agreement, incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2008 filed on May 2, 2008 (SEC File No. 001-02960).*10.13Amendment to Amended and Restated Employment Agreement between Newpark Resources, Inc. and Paul L. Howes dated April 20, 2009, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 23, 2009 (SEC File No. 001-02960).*10.14Amendment to Employment Agreement between Newpark Resources, Inc. and Bruce C. Smith dated April 22, 2009, incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on April 23, 2009 (SEC File No. 001-02960).*10.15Amendment to Employment Agreement between Newpark Resources, Inc. and Mark J. Airola dated April 22, 2009, incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on April 23, 2009 (SEC File No. 001-02960).*10.16Extension Letter Amendment to Amended and Restated Employment Agreement between Newpark Resources, Inc. and Paul L. Howes dated November 30, 2009, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 7, 2009 (SEC File No. 001-02960).*10.17Extension Letter Amendment to Employment Agreement between Newpark Resources, Inc. and Bruce C. Smith dated November 30, 2009, incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on December 7, 2009 (SEC File No. 001-02960).*10.18Extension Letter Amendment to Employment Agreement between Newpark Resources, Inc. and Mark J. Airola dated November 30, 2009, incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on December 7, 2009 (SEC File No. 001-02960).*10.19Employment Agreement, dated as of October 15, 2010, by and between Newpark Resources, Inc. and Jeffery L. Juergens, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 18, 2010 (SEC File No. 001-02960).*10.20Change in Control Agreement dated as of October 15, 2010, by and between Newpark Resources, Inc. and Jeffery L. Juergens, incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on October 18, 2010 (SEC File No. 001-02960).*10.21Newpark Resources, Inc. 2010 Annual Cash Incentive Plan, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 2, 2010 (SEC File No. 001-02960).†*10.22Director Compensation Summary.*10.23Newpark Resources, Inc. 2006 Equity Incentive Plan (As Amended and Restated Effective June 10, 2009), incorporated by reference to Exhibit 4.6 to the Company’s Registration Statement on Form S-8 filed on August 14, 2009 (SEC File No. 333-161378).*10.24Amendment No. 1 to the Newpark Resources, Inc. 2006 Equity Incentive Plan (As Amended and Restated Effective June 10, 2009), incorporated by reference to Exhibit 4.8 to the Company’s Registration Statement on Form S-8 filed on June 9, 2011 (SEC File No. 333-174807).*10.25Form of Non-Qualified Stock Option Agreement under the Newpark Resources, Inc. 2006 Equity Incentive Plan (As Amended and Restated Effective June 10, 2009) (as amended), incorporated by reference to Exhibit 4.9 to the Company’s Registration Statement on Form S-8 filed on June 9, 2011 (SEC File No. 333-174807).*10.26Form of Non-Qualified Stock Option Agreement under the Newpark Resources, Inc. 2006 Equity Incentive Plan (As Amended and Restated Effective June 10, 2009) (as amended), incorporated by reference to Exhibit 4.10 to the Company’s Registration Statement on Form S-8 filed on June 9, 2011 (SEC File No. 333-174807).*10.27Form of Restricted Stock Agreement under the Newpark Resources, Inc. 2006 Equity Incentive Plan (As Amended and Restated Effective June 10, 2009) (as amended), incorporated by reference to Exhibit 4.11 to the Company’s Registration Statement on Form S-8 filed on June 9, 2011 (SEC File No. 333-174807).*10.28Form of Restricted Stock Agreement under the Newpark Resources, Inc. 2006 Equity Incentive Plan (As Amended and Restated Effective June 10, 2009) (as amended), incorporated by reference to Exhibit 4.12 to the Company’s Registration Statement on Form S-8 filed on June 9, 2011 (SEC File No. 333-174807).*10.29Employment Agreement, dated October 18, 2011, by and between Newpark Resources, Inc. and Gregg Steven Piontek, incorporated by reference to the Company’s Current Report on Form 8-K filed on October 21, 2011 (SEC File No. 001-02960).10.30Indemnification Agreement, dated October 26, 2011, between Gregg S. Piontek and Newpark Resources, Inc., incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 31, 2011 (SEC File No. 001-02960).*10.31Form of Restricted Stock Unit for Participants Outside the United States under the 2006 Equity Incentive Plan (As Amended and Restated Effective June 10, 2009) (as amended), incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on July 27, 2012 (SEC File No. 001-02960).*10.32Form of Non-Qualified Stock Option Agreement for Participants Outside the United States under the 2006 Equity Incentive Plan (As Amended and Restated Effective June 10, 2009) (as amended), incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed on July 27, 2012 (SEC File No. 001-02960).*10.33Second Amendment to the Newpark Resources, Inc. Amended and Restated Non-Employee Directors’ Restricted Stock Plan, incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q filed on July 27, 2012 (SEC File No. 001-02960).*10.34Amendment to Employment Agreement, dated December 31, 2012, between Mark Airola and Newpark Resources, Inc., incorporated by reference to the Company’s Current Report on Form 8-K filed on January 4, 2013 (SEC File No. 001-02960).*10.35Amendment to Employment Agreement, dated December 31, 2012, between Bruce Smith and Newpark Resources, Inc., incorporated by reference to the Company’s Current Report on Form 8-K filed on January 4, 2013 (SEC File No. 001-02960).10.36Membership Interests Purchase Agreement, dated February 10, 2014, by and among Newpark Resources, Inc., Newpark Drilling Fluids LLC and ecoserv, LLC, incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed on April 25, 2014 (SEC File No. 001-02960).*10.37Newpark Resources, Inc. 2014 Non-Employee Directors’ Restricted Stock Plan, incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S-8 filed on May 22, 2014 (SEC File No. 333-196164).*10.38Form of Non-Employee Director Restricted Stock Agreement under the Newpark Resources, Inc. 2014 Non-Employee Directors’ Restricted Stock Plan, incorporated by reference to Exhibit 4.8 to the Company’s Registration Statement on Form S-8 filed on May 22, 2014 (SEC File No. 333-196164).10.39Form of Indemnification Agreement, incorporated by reference to Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q filed on July 25, 2014 (SEC File No. 001-02960).10.40Third Amended and Restated Credit Agreement dated March 6, 2015 by and among Newpark Resources, Inc., JPMorgan Chase Bank, N.A., as Administrative Agent, Bank of America, N.A., as Syndication Agent, Wells Fargo, National Association, as Documentation Agent, and lenders who are parties thereto, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on March 10, 2015 (SEC File No. 001-02960).*10.41Newpark Resources, Inc. 2015 Employee Equity Incentive Plan, incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S-8 filed May 22, 2015 (SEC File No. 333-204403).*10.42Form of Restricted Stock Agreement (time vested) under the Newpark Resources, Inc. 2015 Employee Equity Incentive Plan, incorporated by reference to Exhibit 4.8 to the Company’s Registration Statement on Form S-8 filed May 22, 2015 (SEC File No. 333-204403).*10.43Form of Restricted Stock Unit Agreement (performance-based) under the Newpark Resources, Inc. 2015 Employee Equity Incentive Plan, incorporated by reference to Exhibit 4.9 to the Company’s Registration Statement on Form S-8 filed May 22, 2015 (SEC File No. 333-204403).*10.44Form of Restricted Stock Unit Agreement (retirement eligible) under the Newpark Resources, Inc. 2015 Employee Equity Incentive Plan, incorporated by reference to Exhibit 4.10 to the Company’s Registration Statement on Form S-8 filed May 22, 2015 (SEC File No. 333.204403).*10.45Form of Restricted Stock Unit Agreement (not retirement eligible) under the Newpark Resources, Inc. 2015 Employee Equity Incentive Plan, incorporated by reference to Exhibit 4.11 to the Company’s Registration Statement on Form S-8 filed May 22, 2015 (SEC File No. 333.204403).*10.46Form of Restricted Stock Unit Agreement (international) under the Newpark Resources, Inc. 2015 Employee Equity Incentive Plan, incorporated by reference to Exhibit 4.12 to the Company’s Registration Statement on Form S-8 filed May 22, 2015 (SEC File No. 333.204403).*10.47Form of Non-Qualified Stock Option Agreement (retirement eligible) under the Newpark Resources, Inc. 2015 Employee Equity Incentive Plan, incorporated by reference to Exhibit 4.13 to the Company’s Registration Statement on Form S-8 filed May 22, 2015 (SEC File No. 333.204403).*10.48Form of Non-Qualified Stock Option Agreement (not retirement eligible) under the Newpark Resources, Inc. 2015 Employee Equity Incentive Plan, incorporated by reference to Exhibit 4.14 to the Company’s Registration Statement on Form S-8 filed May 22, 2015 (SEC File No. 333.204403).*10.49Form of Non-Qualified Stock Option Agreement (international) under the Newpark Resources, Inc. 2015 Employee Equity Incentive Plan, incorporated by reference to Exhibit 4.15 to the Company’s Registration Statement on Form S-8 filed May 22, 2015 (SEC File No. 333.204403).10.50First Amendment to Third Amended and Restated Credit Agreement, dated December 18, 2015, by and among Newpark Resources, Inc., JPMorgan Chase Bank, N.A., as Administrative Agent, Bank of America, N.A., as Syndication Agent, Wells Fargo Bank, National Association, as Documentation Agent, and the lenders who are parties thereto, incorporate by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed December 21, 2015 (SEC File No. 001-02960).*10.51Amendment to Amended and Restated Employment Agreement dated as of February 16, 2016, between Newpark Resources, Inc. and Paul L. Howes, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 18, 2016 (SEC File No. 001-02960).*10.52Amendment to Employment Agreement dated as of February 16, 2016 between Newpark Resources, Inc. and Gregg S. Piontek, incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on February 18, 2016 (SEC File No. 001-02960).*10.53Amendment to Employment Agreement dated February 16, 2016 between Newpark Resources, Inc. and Bruce C. Smith, incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on February 18, 2016 (SEC File No. 001-02960).*10.54Amendment to Employment Agreement dated February 16, 2016 between Newpark Resources, Inc. and Mark J. Airola, incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on February 18, 2016 (SEC File No. 001-02960).*10.55Amendment to Employment Agreement dated February 16, 2016 between Newpark Resources, Inc. and Jeffery L. Juergens, incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed on February 18, 2016 (SEC File No. 001-02960).†21.1Subsidiaries of the Registrant.†23.1Consent of Independent Registered Public Accounting Firm.†31.1Certification of Paul L. Howes pursuant to Rule 13a-14 or 15d-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.†31.2Certification of Gregg S. Piontek pursuant to Rule 13a-14 or 15d-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.†32.1Certification of Paul L. Howes pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.†32.2Certification of Gregg S. Piontek pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.†95.1Reporting requirements under the Mine Safety and Health Administration.†101.INSXBRL Instance Document†101.SCHXBRL Schema Document†101.CALXBRL Calculation Linkbase Document†101.LABXBRL Label Linkbase Document†101.PREXBRL Presentation Linkbase Document†101.DEFXBRL Definition Linkbase Document_______† Filed herewith.* Management compensation plan or agreement87